With the end of furlough, interest rates on the rise and the stamp duty holiday a distant memory, Azeem Salemohamed of estate agent Sandra Davidson, asks if we’ve seen the end of a hyper-inflated housing market.
October was always going to be an interesting time for the housing market, with the end of furlough and other grant schemes coming the previous month. Now we’re back in the real world of market forces, we are starting to see the impact on house prices and sales activity.
If we dive into the Rightmove data for October, compared to the same month in 2020, it looks like the market has slowed down in terms of available properties, new instructions and detailed views. There were 1,920 properties for sale in our patch a year ago, this year there are 1,343. Consequently, last year there were almost 2 million detailed views of homes on Rightmove, compared to 1.6 million this year.
We know that fewer properties are coming on to the market. The question is why? According to Zoopla’s analysis for September, prices rose by 6.6% month-on-month, equating to 3% expected growth in 2022. What we’re seeing here is not sustainable.
During the stamp duty holiday, people were making offers left, right and centre. They were also offering more than the property was worth, in the knowledge that they would make the tax saving – and in cold cash, not thought their mortgage. House prices rocketed, which didn’t make sense in the context of a recession and global pandemic. But this was an artificial market. Now it looks like we are returning to a level playing field.
Buying and selling at the same time?
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Buying and selling at the same time?
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We can see this in our offices. Over the past six months people were putting in aggressive offers, trying to beat other buyers. Now they are taking more time. Previously we were receiving an offer for every three viewings, currently that figure is more like every six to eight. Things are cooling off and people are becoming more pragmatic.
Fewer properties are also coming onto market because second-time buyers are struggling to find something to move to if they are up-scaling. Even though price increases mean they are selling for a premium, the property they are looking to buy has gone up too, and by a greater amount.
With Christmas around the corner, it feels like people are just waiting to see what will happen. There’s a feeling of caution and the start of a move back to a normal market rather than a hyper-inflated one. It will be interesting to see what happens in November and December.
For us at Sandra Davidson, there’s been good news. While the number of properties and agreed sales have fallen across our patch by 30%, our business has remained steady. We took on 19 new properties this year compared to 20 last, meaning that our market share is stronger than ever. As we move into winter, come rain, sleet or snow we’ll continue to work hard to remain the leading agent in the area. So, if you are thinking of selling, call us now for your free market appraisal.
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