House price growth appears to be slowing, as the cost-of-living crisis and higher mortgage rates are massively affecting homeowners. The Land Registry has said that prices have risen by 7.8% year-on-year during June, compared to only 12.8% in May. Here we analyse what has actually happened to house prices and the trajectory of the market.
The property market
The property market soared during last year, especially as buyers have rushed to take advantage of the government’s (temporary) cut to the stamp duty. This therefore resulted in large spikes of sales around the deadlines that occurred in June and September 2021.
The total number of purchases happening every month is now much closer to the pre-pandemic levels. Data from HMRC also shows that around 105,000 transactions took place in July.
Changes over time
House prices have risen massively in the past year, with the stamp duty holiday and pandemic bringing about a much more volatile market than before. The UK Land Registry’s House Price Index is typically the most reliable barometer of what is happening with house prices, since it is based on actual property sales and not asking prices.
The Land Registry also says that the average house price in the UK rose by as much as 7.8% year-upon-year in June to reach £286,397.
Slowing down?
After the frenzy of home-moving that occurred in 2021, there is now a subsequent mismatch between demand and supply. Propertymark has reported that its member had, on average, 24 properties for sale per branch during July, compared to a level at pre-pandemic times of 51. Rightmove, on the other hand, says that available stock has taken a downturn of 39% compared with 2019.
The imbalance between demand and supply is also actually reflected in Rightmove’s data that is ‘time to sell’. It typically estimates that homes took, on average, 33 days to sell during July, down from a total of 36 days the year earlier.
What about the rest of 2022?
Experts have predicted that growth from house prices will slow during the rest of the year, with the cost-of-living crisis being likely to affect the total number of homes being sold. Rightmove have said that a combination of more properties coming onto the market and affordability constraints could result in pricing falling ever so slightly in some of the months during the second half of the year.
It also forecasts that pricing at the end of the year will be 5% higher than those that have been recorded in 2021. Estate agents, however, are predicting a much slower market during 2023. Knight Frank have also forecast a rise of about 1%, Hamptons predicting pricing will remain the same, and Savills also anticipates a fall of about 1%.
Farr and Farr Property Services are Gloucester’s longest established independent estate agency with five branches in and around the Gloucester area. We are a modern estate agency with traditional values and help you with buying, selling, and renting properties of all kinds, whatever route you want to go down. We are experts in our field and deeply proud of the work we have achieved! Headed by Julian Farr, one of the city’s most respected and well known faces, our family founded independent team operates from four local offices covering Gloucester and the surrounding villages. Our experienced, knowledgeable and professional staff uphold our reputation for customer service at all times, whilst adding that personal touch to ensure your experience is as stress free as possible.
If you would like some more information, take a look at our website www.farrandfarr.co.uk or take a look at our local branches here on our website, where you can find out more about us and what we stand for, as well as any further relevant information that you require as it relates to your property enquiries.
