Your December Newsletter

Low stock continues to push house price growth

Despite the wider economic challenges impacting the UK property market, a continuous disparity between supply and demand has pushed house prices up to a record high after a 0.9% rise in October.*

According to Rightmove’s House Price Index, the rise represents and increase in value upwards of £3,398, with the price of an average home now standing at £371,158.*

This new asking price record is somewhat of a surprise given the market uncertainty that followed former Chancellor Kwasi Kwarteng’s mini budget in late September. There was also little sign of downwards price pressure towards houses already on the market, with the number of reductions up by 2% following the announcement to 23% of all properties reduced, which is still a far cry from the pre-pandemic five-year average of 32%. *

Tim Bannister Rightmove’s Director of Property Science, comments:

“What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues."

"New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average. It will take a bit of time for the market to settle into a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”

It's understandable that some prospective buyers will be pausing their plans momentarily in an effort to ‘wait-out’ the next few weeks and months until market uncertainty wears off and the full picture becomes clear. Despite this, demand still holds steady at 20%* higher compared to a more normal market of 2019. This trend also follows through to the first-time-buyer sector, with demand still high at 24%* compared to 2019, further demonstrating that buyer confidence has continuously improved since the pandemic.

Although some buyers are awaiting a clearer outlook for the time being, those who have already agreed to their purchase appear to be proceeding with confidence. Only 3.1% of sales agreed fell through in the two weeks following the mini-budget announcement, which parallels the 3.0%* reported over the same two weeks in 2019. UK agents are recording that those who have managed to secure a low-rate mortgage offer are eager to complete their purchase as fast as possible, before the offer closes.

Tim concludes: “The vast majority of buyers who had already agreed to their purchase are still going ahead. Agents report that many of those who managed to secure a mortgage offer at a lower rate before lenders quickly increased them are now rushing through their agreed deal to avoid their offer expiring and facing a higher rate when they come to reapply. It’s understandable that some new movers who have the option to wait may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home.”

"With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip supply and supports prices.”

Considering the increase in average home values, do you know the value of yours? Book a valuation with us today to find out.

Rightmove *

Average rents continue to rise across the UK

In the fallout from the Bank of England’s base rate rising far above the waterline at 3%, mortgage rates and rents continue to rise in line with inflation, and the domino effect of the economic climate becomes ever more apparent in today’s housing market. Data from the Office for National Statistics (ONS) found that private rent paid by tenants in the UK increased by 3.8% over the year to October 2022. *

The latest Index of Private Housing Rental Prices from the ONS also showed that annual rental growth was slightly higher in October compared with the 3.7% recorded in September. The new figure is the largest annual percentage change seen since the data series began in January 2016, which proves that rental prices are growing rapidly in the current economic climate. *

Regional growth

Annual private rental prices were found to have increased by 3.7% in England, 3.2% in Wales, and 4.2% in Scotland in the 12 months leading up to October of this year.*

Regionally, the highest annual percentage change in private rental prices was found in the East Midlands at 4.8%, while London saw the lowest at a notable 3%. *

The data also found that the annual percentage change of private rental prices remained steady between November 2019 and the end of 2020. Rental price percentage changes slowed in early 2021 and gained momentum later that year. Private rental prices have increased across all regions in 2022, including in London. *

Additionally, The Association of Residential Letting Agents (ARLA) outlined in their Housing Insight Report from September 2022 that the demand for properties is continuing on a rising incline, which is hiking up prices. According to ARLA, the supply of available houses to rent has reportedly not risen in the last four months. **

The Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey also reported that tenant demand remained steadfast throughout October, with tenant enquiries on the rise across the UK. ***

While the ONS figures are telling, the report made sure to note that these supply and demand pressures can often take time to feed through to the Index of Private Housing Rental Prices, which reflects price changes for all private rental properties rather than only newly advertised homes to rent.*

Supply and demand

The underlying issue has remained consistent over the past year, with a continued trend of landlords leaving the market and prices rising due to a shortage of rental supply. The disparity between supply and demand has only accelerated in the midst of the cost-of-living crisis. It’s understandable that in the thick of rising interest rates, potential first-time buyers may be more inclined to put their plans on hold for the time being and opt for renting instead.

The unmanageable rates of demand are likely to see prices continue to grow into 2023, with a lack of properties to meet the current competition in the market and too many landlords abandoning the market at a pivotal moment.

Are you thinking of becoming a landlord? Contact us today to find out about our lettings services.

Office for National Statistics - Index of Private Housing Rental Prices *

The Association of Residential Letting Agents – Housing Insight Report September 2022 **

The Royal Institution of Chartered Surveyors - UK Residential Market Survey ***

Demand on the rise for energy-efficient homes

Santander’s Buying into the Green Homes Revolution Report has revealed that nine in ten estate agents have acknowledged that demand is rising among homebuyers for properties with higher energy efficiency ratings. *

The research unveiled that estate agents are poised to play an important role in increasing awareness among homebuyers regarding energy efficiency, as demand for green homes continues to rise.

Green homes growing in popularity

Santander’s report asked 2,000 homeowners and 175 estate agents for their perspectives on retrofitting and found that there is a fast-growing interest among homebuyers for energy efficient homes. 85% of estate agents also reported increased demand for greener properties in the past twelve months. *

54% of the estate agents surveyed pinned the growth in demand down to the rising cost of energy bills, alongside an increased number of green mortgage products from lenders (45%) and a greater awareness of the need to tackle climate change from an individualistic approach (51%). *

Growing awareness in the environmental crisis and the rising cost of energy is steering buyers towards competing for homes with a smaller carbon footprint, which is why buyers on average are spending 15.5% more for a property with a high EPC (Energy Performance Certificate) rating. *

Estate agents stepping in

While engagement for green homes is growing, there appears to be a knowledge gap amid homeowners, with 60% not knowing the EPC rating of the property they live in, according to Santander’s survey. *

The research indicates that estate agents are taking a more proactive approach in helping bridge this gap for sellers, with 66% in the past year undertaking training to better improve their knowledge, and a further 29% planning to do so in the future. In addition to this, 61% have updated their marketing materials over the past year to focus more prominently on energy efficiency information. *

Homes with poor energy efficiency

Not only have agents reported a rise in demand for green homes, but they also acknowledged a decrease in demand for homes with poor EPC ratings. Over the past year, 70% of agents reported seeing homeowners struggle to sell their properties due to poor energy efficiency. Additionally, the time it takes to sell is on average 3 months longer compared to a property with a good EPC rating, according to Santander. *

Graham Sellar, Head of Business Development – Mortgages at Santander commented: “The feedback from estate agents is striking and reveals that in an environment of the rising cost of living pressures, there has been a real shift in preference among buyers for homes with reduced energy costs.

“Estate agents will be a key part of raising understanding and awareness among buyers and sellers on the benefits of having an energy-efficient home, so it is encouraging so many are being proactive in improving their understanding. With the findings showing a clear ‘green home premium,’ the benefits are clear, and any changes made will not only reduce buyers’ bills but make the property more attractive to buyers in the future.” *

Are you on the hunt for an energy-efficient home? Browse our current selection of properties today.

Santander – Buying into the Green Homes Revolution Report *

Property sales hold steady with a fifth of stock sold every month

According to a new analysis of property market performance over the past three months, estate agents across the UK have facilitated just over 43,000 transactions per month – meaning they have sold an average of 17% of all homes listed for sale on a monthly basis.*

A study has been conducted by Get Agent to reveal where in the UK estate agents with the highest turnovers reside. Registered property transactions, the level of sales turnover activity, and the transactions of all homes listed for sale were all analysed.

Regional performance

The latest figures from the study revealed that both the North West and Yorkshire and The Humber rank top. Across the North West, estate agents are currently selling over 5,500 homes per month on average, whilst in Yorkshire and The Humber, the monthly average sits at 4,200.

However, when the regional rate of sales is compared to the total stock listed, agents across both regions are selling the equivalent of an astounding 20% of all homes for sale each month.

In the West Midlands and North East, the average is a notable 19%, while the East Midlands follows close behind with 18%.

The South West, South East and East of England are tied, with monthly sales volumes landed by agents across these areas equating to 17% of the overall stock listed on the market.

In Wales, agents were found to be selling around 15% of total market stock each month, while London ranks last at a respectable 12%.*

Market perseverance

The data is further evidence of the market remaining resilient during times of uncertainty. Homeowners and first-time buyers can take comfort in the government’s return to a more traditional economic approach, which is likely to continue to stabilise the mortgage markets. The bank of England indicated in mid-November that a continued rapid hike of the base rate in 2023 would be unlikely, so this suggests that concerns around mortgage rates creating a demand cliff edge will not now come to pass, protecting homeowners from their assets declining in value. Buyers and sellers alike appear to be proceeding with confidence, and their trust in the market continues to pay off.

Mal McCallion, COO of Get Agent, commented: “The property market has been motoring since the pandemic and this is abundantly clear when analysing just how hard the nation’s estate agents have been working. And now, even during a more difficult period for the market, in many areas of the UK correctly-priced homes are still selling as quickly as agents can list them."

"Of course, it’s important to note that a good quality agent is based on far more than their sales turnover - and the challenges they face differ from one property pocket to the next. In today’s market, the real value added by agents isn’t just through speed of sale or asking price achieved - it’s by using their experience and knowledge to synthesise these skills and get the sale over the line."

"These traits are particularly invaluable in slower areas of the market and it’s fair to say that now, more than ever, quality counts - you’re going to need all the attributes of a great agent to get your best sale through for the rest of this year and the next.”

Thinking of selling your home? Contact our team of experts today to get started.

*Get Agent