Property Market Update: September 2023
Summer Slowdown? Not Quite
Summers are usually sleepy in the property market as everyone’s soaking up the sun. But this year, it was even quieter, thanks to those pesky high mortgage rates.
However, the good news is that according to Rightmove since the end of July, mortgage rates have been inching down, albeit slowly. Still, the average rate for a 5-year fixed mortgage stands at 5.67%, up from 4.16% just a year ago.
What We’re Watching
We keep our eyes on some key indicators to understand what’s happening in the housing market.
First up, the asking prices. According to Rightmove, they’ve gone up by 0.4% this month, reaching an average of £366,281.
But hang on, that’s a bit smaller than what we usually see during this time.
Why? Well, sellers are getting savvy and pricing their homes right from the get-go, which is great for potential buyers.
Now, let’s talk about the number of reductions. If a property’s price drops after being listed, it tells us that buyers are pretty price-sensitive.
And guess what?
Last month, according to Rightmove 36% of properties for sale had their prices reduced, the highest since 2011. On average, these reductions amounted to 6.2%, or roughly £22,709 based on the national average asking price.
Why Are Prices Rising?
So, you might be wondering, why are property prices still climbing?
Well, while the increase is smaller than usual for this time of year, it’s because sellers are getting it right with their initial pricing. Setting the right price from the beginning is the secret sauce to attracting buyers.
Rightmove’s property guru, Tim Bannister, puts it like this:
“As we enter a key selling season, more people who have been thinking about what they need from a home and where they want to be living next year and beyond are taking action and coming to market.”
More Choices for You
If you’re in the market for a new place, you’re in luck. As we head into the bustling autumn season, more homes are hitting the market.
In the first week of September alone, there were 12% more properties for sale compared to the unusually quiet August according to Rightmove.
But don’t think this means a huge influx of homes; there are still 7% fewer listings than in 2019. Realistically priced homes are flying off the shelves, with sales happening faster than they did in 2019.
Mortgage Musings
Now, let’s talk mortgages.
It’s been a full year since Liz Truss’ eventful mini budget during her brief time as Prime Minister.
This budget didn’t just impact the broader economy; it also shook consumer confidence to its core. Fortunately, the abrupt disruption has now settled, and the property market stands strong in the face of rising interest rates and the ongoing cost of living challenges.
According to reports from Property Industry Eye, there’s an expectation that the majority of the UK’s leading mortgage lenders will be cutting their mortgage interest rates this month in a bid to attract new business.
Zoopla suggests that this move could potentially make housing more affordable, especially if mortgage rates see a decrease. The reason? Wages are on the rise at a pace quicker than house prices, offering a glimmer of hope for homebuyers.
Rates have been on a downward slide since the end of July.
For example, according to Rightmove the average rate for a 5-year fixed, 85% loan-to-value mortgage is 5.69%. That translates to around £1,198 in monthly repayments if you’re eyeing your first-time-buyer dream home at £225,244.
This is an interesting time for the property market, we are looking
forward to riding the Property Rollercoaster into 2024.
All data and statistics courtesy of Rightmove.co.uk, The Property Industry Eye, and Zoopla.
