As Christmas trees go up, decorations are retrieved from the loft and the brussel sprouts are being soaked, what is going on with house market at the moment?
“Its beginning to look a lot like Christmas”
The post covid price explosion has come to juddering halt in recent months. It’s been widely reported the effects of inflation, the cost-of-living crisis, the increase in interest rates and slowing of the economy have had on disposable incomes.
As disposable incomes reduce, and prices go up there is an increased financial pressure on some house buyers that restrict the amount of mortgage they can take on and the price they can pay for a home.
This can be seen in the November house price data. According to the Halifax the average price dropped 2.3% in November, which is the highest rate since October 2008 (and we know how that ended!) Nationwide Building Society’s data gave a 1.4% average price drop. Prices are heading down.
What else should I know about the housing market?
Yes average house prices are reducing but we’re not seeing a price crash. In fact, a lot of the housing data is tracking historic trends:
- Average price of property being put on the market reduced by 1.1% in November, which is similar to average price reductions in pre-covid years of 2015-2019.
- Price reductions in 8% of unsold properties in October 2022 is only slightly more than the 7.5% in October 2019.
- Buyer demand is up 4% compared to 2019.
Thoughts from James Raspin, Chief Surveying Officer at Survey Hut
“It is a funny time in the property market at the moment. There is still activity, albeit at a reduced level, and we are in the lead up to Christmas which is usually the quietest time of the year.
The relative high interest rates are putting off a lot of buyers but many mortgage experts are forecasting interest rates will drop significantly in the new year as banks become more pro lending and offer more mortgage products.
A lot of non-time sensitive buyers are sitting on the side lines either waiting for interest rates to reduce or prices to drop further and stabilise to improve affordability before entering the market.
We would not be surprised to see prices rebound in 2023 as affordability improves.”
Get in contact with Survey Hut for all home surveys or valuations
