Our latest Property Sentiment Index showed that although volatility in the market was evident, buyer and seller sentiment remained strong in May, with the impact of subsequent mortgage rate rises yet to feed through.
In May, 73% of UK buyers were confident they’d purchase a property within the next three months, a slight increase when compared to April (70%); and 65% of sellers were confident they’d sell their properties within the next three months, up from 64% in April.
- 73% of active buyers in the UK were confident that they would purchase a property within the next 3 months
- 65% of sellers in the UK were confident that they would sell their property within the next 3 months
- 42% of properties were Sold Subject to Contract (SSTC) within 30 days of first being advertised for sale, compared with 61% in May 2022
- Sellers must price sensitively if they are pricing to sell
Our Chief Executive Officer, Jason Tebb, discusses the insights from our latest report:
Despite a decline in transaction numbers in April, rising transaction and mortgage approval numbers in March indicated that the market had shaken off the travails of the autumn and the fallout from the mini-Budget, with house prices continuing to soften slightly and settle into a ‘new normal’. Mortgage pricing also calmed, with borrowers accepting that rates are going to be higher than has been typical over the past few years. However, it would appear that volatility in the housing market is not fully behind us, with the latest news on inflation sending Swap rates higher and increasing the price of fixed-rate mortgages once again.
That said, buyer and seller sentiment was not rocked during May. Our data for May shows 73% of UK buyers were confident that they’d purchase a property within the next three months, compared to 70% in April. Regional differences demonstrate positivity even more starkly, with 75% of London buyers confident they’d purchase a property within the next three months, up from 71% in April. Seller confidence also improved slightly, with 65% of sellers in the UK confident they’d sell their property within the next three months in May, compared with 64% in April. Some areas demonstrated even more positivity, with 72% of Scottish sellers confident they’d sell within the next three months, up from 66% in April. 42% of properties were SSTC within 30 days of first being listed for sale in May, fairly consistent with April’s 43%, while 6% of buyers in need of a mortgage were either very worried or slightly concerned about mortgage availability in May compared with 7% in April.
It’s no real surprise that buyer confidence was strong given that prices are softening in some areas. There’s more choice of stock than has been the case for a while and if you can afford to buy, now is a great time to make a move. Although some buyers will inevitably be worried about higher mortgage rates, there seems to be a growing realisation of the need to adapt to a new, elevated level of pricing, in place of the unsustainable rock-bottom rates of the past.
We wait to see how recent volatility pans out but what it does provide is a sense check. There are people who need or want to move, but buyers also believe prices are inflated. With offers regularly being made below asking price, pricing correctly in the first instance is crucial. Sellers and their agents should be having conversations, not just about pricing but about timing. If you want to move by a certain date, ask your agent about various pricing structures and how being sensitive on price can speed up the time it takes to find a buyer. When the market is in flux, pricing competitively means pricing ultra-realistically.
The fallout from the latest inflation figures may be felt more keenly in June’s data, with the impact of higher mortgage rates and potential for further base rate rises unsettling buyers and sellers alike. It looks as though the next three months might well be tougher than originally thought and there may be a negative knock-on impact on transaction levels. However, there is no reason why sellers who take advice from an experienced local agent, and price realistically under their guidance cannot still achieve a timely sale.
You can read the full report here.
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