MARKET ANALYSIS: Property supply reaches seven-year high as market rebounds
Property expert Kate Faulkner reports good levels of supply that could lead to positive transaction numbers this Autumn.
Zoopla’s chart shows how good supply is and this in itself will bring more people to the market as they see more choice and more properties that they would like to buy, all this helps to energise the property sales.
It also means that with more property supply as well as demand, it’s less likely that prices will be fuelled too much out of people’s reach and, if we see some more falls in the base rate between now and Christmas, this will help to get people out and about for 2025 and hopefully see us returning to a more ‘normal’ market.
Summary of the latest property supply and demand data
Zoopla – Market activity stronger than last year
“All key measures of sales market activity are higher than 2023 supported by economic growth and rising consumer confidence.
“Buyer demand for homes is a fifth higher than this time last year. New sales agreed are almost a quarter higher, building on the increased momentum in sales from earlier in the year as mortgage rates fall to an average of c4.5% for a 5-year fixed rate at 75% LTV. Sellers continue to bring homes to market at an above-average rate. Many of these sellers are also buyers, which explains why sales agreed continue to increase.
Homes for sale continues to increase and now stands at a 7-year high of 33 homes per agent.”
“More new supply means the stock of homes for sale continues to increase and now stands at a 7-year high of 33 homes per agent, giving buyers ever more choice. More supply will keep headline price inflation in check over 2024 and into 2025. Serious sellers must price realistically to agree a sale within a reasonable time.”
No material impact from August base rate cut
“The long-awaited cut in the base rate in August was welcome news for the wider economy and consumer sentiment, but it has had no material impact on levels of buyer demand compared to the underlying trend over recent weeks. The real reason buyer demand for homes is 20% higher than last year is down to a fall in demand over summer 2023 in response to the spike in mortgage rates.
“However, our data did register a modest increase in new sales agreed in the days following the base rate reduction as wary buyers waited for a rate cut to agree a sale. The good news is that there is sufficient buyer demand to support rising sales volumes. Sales agreed up 23% is a truer reflection of the health of the sales market which remains on track for 10% more sales than 2023.”
“Since the Bank Rate cut on the 1st of August, the number of potential buyers contacting estate agents to view homes for sale is 19% higher than in the same period a year ago. This comparison is with a very subdued period in 2023, when the market was dealing with the fallout of unexpectedly high inflation figures and peak mortgage interest rates. However, this improvement in the buyer demand trend from +11% across the month of July shows the immediate and strong impact of the first Bank Rate cut since 2020. Agents report that increased political certainty and the improving economic outlook is also helping with buyer interest.”
Latest transaction data from Chris Watkin and TwentyEA
This latest data shows that both listings and sales are doing extremely well versus the years prior to the pandemic, matching the more ‘normal’ year of 2018:
Hottest and coldest postcodes
At a more local level, The Advisory shows, by postcode which postcodes are hot and cold. For example, in GU18 (Lightwater), 76% of the properties on the market are under offer, in contrast, L2 (Liverpool) being the worst performers according to this index, with only 7% of properties on the market under offer. Lightwater, Bristol, Sheffield and Stockport are reported as having some of the busiest markets, while Liverpool, London and Birmingham have some of the slower ones.
To find out what the Propcast market is reporting about your local postcode visit: House Selling Weather Forecast here.