Estate agents are seeing a more traditional picture emerge from the summer housing market as we progress through towards autumn. Could things be getting more predictable for the sector?
Property transactions have defied many expectations over the past couple of years, with heightened activity and significant house price rises in the face of any difficulties presented by Covid-19 and other economic undertones.
But, as many have long since been predicting, the housing market appears to be returning to a more stable, ‘normal’ level of activity. This is demonstrated in the June report released by Propertymark looking at the state of things as they stand.
The report’s overall findings showed that more homes are selling for asking price, while new buyer numbers and viewings are levelling off. However, it seems that the number of sales agreed is still going strong as people’s appetite remains high for bricks and mortar in the UK.
A steady summer
One of the key findings in Propertymark’s June analysis was the 29% reduction in viewings per property since April this year. In April, each property on the market had around 6.2 viewings, falling to 4.4 last month.
The number of prospective buyers also seems to have peaked in spring before levelling off over the past couple of months, which is what agents would expect from a more traditional housing market, says Propertymark. This is another sign of a return to normality for the housing market.
Demand for homes remains extremely strong, though, portrayed by the findings that the number of sales agreed has remained unchanged for three months in a row at an average of nine. Looking at figures between 2010 and 2019 pre-pandemic, this is also very similar.
The report adds: “Sales agreed as a percentage of stock remains high at 33% in June. This is compared to the pre-pandemic average of 17% of stock sold in the month of June between 2010 to 2019.
“However, some buyers are starting to secure homes under the asking price, with 27% of branches now reporting that most sales were completed below asking price compared to a low of just 15% in March.”
‘Relentless’ housing market cooling
Another key finding from the report is the increase in the time it takes to exchange on the average property. Of the estate agency member branches surveyed, 72% reported the average time between offer accepted and exchanging contracts in May was 13 or more weeks – up from 54% in March.
This is higher than might be expected from the average property sale, and is the highest it’s been over the past year.
Nathan Emerson, chief executive offer at Propertymark, comments: “For the past two years agents have seen a relentless market which defied patterns that we as practitioners had become accustomed to.
“However, this summer is seeing seasonal trends return. This cooling down is allowing the number of homes available to buy to recover, and interestingly, a subtle but telling change is in the prices being achieved.
“Compared to March 2022, this month has seen a 12 per cent increase in the number of agents reporting that the majority of their sales were agreed below asking price.”
House prices continue to rise
In other research, the most recent ONS house price index has revealed that house prices have risen by 12.8% over the past year, with the average property now worth £283,000; £32,000 more than a year ago.
The highest annual house price growth was in the south west of England, where prices increased by an average of 16.9% in the year to May 2022. This was up from a growth rate of 14.7% in April 2022.
Conversely, London remains the region with the lowest annual house price growth, with an 8.2% increase during the same timeframe. This is up from the 6.9% rise recorded in April 2022.
