So many people that I have met over the last month are telling me that the property market has gone quiet and that property isn’t moving. It’s an easy assumption to make. There are more houses on the market and there are the telltale signs of a quiet market becoming more and more regular – property price reductions.
What is actually happening can be explained by a few factors and, personally, I still believe that we are in a productive market as long as you approach it in the right way.
As we’ve discussed previously, the end of the Stamp Duty Land Tax holiday came at the start of April. The beginning of the year saw the inevitable rush to complete a sale before the additional tax would have to be paid. Activity levels were high and properties due to complete in April found their way into March. Once this deadline passed the activity in the market settled back to a level that would be expected for the time of year. The first misconception was a quietening of activity from a heightened market was a dip in the current market.
In fact Rightmove have released their figures for May on agreed sales and it has been the busiest May since 2021 and the busiest month of sales since March 2022, at the end of the Covid property market boom. This ‘quieter’ market is actually posting sales figures higher than any for the last three years!
The next two factors affecting the market are stock levels and property prices. This time of year is always the busiest for property instructions. The weather is nice (mostly) and the general assumption is that this is when the market is most active – something certainly backed up by the May sales figures. This means that stock levels swell.
The problem we are seeing is that seller expectations haven’t changed since the availability of more affordable finance. Mortgage rates were at levels of 2% but have since increased beyond 4%. This has put further strain on purchasers and means affordability is heavily affected. Properties are reaching the market at higher value levels than potentially they should be and this means slower times to agree sales and the higher chance of reductions to generate the interest that is lacking.
We are still seeing some agents pricing high to secure listings. I am not afraid to say that there are properties we have been to that have not listed with us only to come to the market ten of thousands of pounds higher than suggested and then not sell. It has become even more important to speak to an expert and understand the current market. Big numbers are nice but if there is no chance of getting them they might as well be zero. Come speak to our experts and we will guide you through a challenging but active market.
Craig Turner, Property Department Manager & Valuer, Kendal