Firstly, thank you for taking the time to read this article. As a sweeping trend, we find ourselves in un-chartered territory in comparison to the post-pandemic property market.
As an agency, we are consistently working hard to keep our finger on the pulse of understanding national trends that cause an impact on our local market which I would like to highlight below.
The freeze in energy prices announced by the Prime Minister is welcomed news for households and businesses and is expected to curb inflation by up to 5%. An average of independent forecasts published in August expects the rate of inflation to lower over 2023 and by 2024 to have dipped back to below the Bank of England 2% target.
While the Bank Rate is still expected to rise to over 2% by the end of the year, it is not predicted to rise much above 3%, which is still low by historic standards. The current economic situation is unchartered territory for many homeowners, particularly those too young to remember the prolonged periods of double-digit inflation and high interest rates in the 1970s and 1980s. Mortgage lending regulation also means the housing market is in a different state to the Global Financial Crisis.
The first half of the year has been remarkably busy, with sales activity expected to moderate as we enter the colder months. Reports show that over 100,000 sales have taken place each month to date in 2022, a feat achieved only twice in the last fifteen years. While demand remains higher than pre-pandemic times, mortgage approvals, which are considered a forerunner for demand, have eased back in recent months. In July, 63,770 mortgages were approved, a 5% fall on the pre-pandemic average.
While the cost of living is surging across almost every aspect of our lives, house prices continue to defy expectations, with property prices continuing to rise in most regions, albeit the pace of annual price growth has moderated. After significant price rises across the market in the last two years, 12-month expectations for price growth have eased from a net balance of +78% of agents in February to +30% in July. Price growth over the course of 2022 is predicted to be around 7%, with the supply/demand imbalance which has underpinned growth set to ease over the coming months.
At 8.0%, annual property price growth in the South West has moderated from 11.3% at the start of the year. However, in many areas in the West of England, annual property price growth remains in double digits. Price growth is currently strongest in Sedgemoor and Somerset West and Taunton.
According to Rightmove, homes continue to go under offer quickly, taking an average of just 29 days to sell (Rightmove). Conversely, across the UK housing market the time taken to complete a sale has risen, now in the region of four months, as conveyancing delays remain a significant issue. For buyers seeking to move in by Christmas, the clock is ticking.
With sales volumes less frenetic, levels of private stock turnover, while remaining higher than historic averages, are beginning to moderate. Across the region the proportion of homes changing hands is lower than the 4.3% UK average. In several of the region’s sought-after markets, average prices exceed the current South West average of £322,329.
Whilst the media continue to highlight all the above, I am pleased to share that it is not all doom and gloom. Here at David Plaister, we are still seeing sales being agreed and viewings continue, despite the uncertainty.
I am pleased to show you our latest EZINE (a digital magazine), displaying our current portfolio of properties for sale. The Ezine forms part of our holistic marketing approach and is sent to our extensive database, contacts, and partner agents via The Guild of Property professionals (800 + partner agents).
To view our ezine, please click HERE
David Plaister Ltd