Is it a seller’s or buyer’s property market?
It’s fairly clear now that the first six months of this year were more successful than anyone could have hoped for – with transactions down by 6% versus 2017-19 volumes (according to Chris Watkin using TwentyEA data) and prices starting to fall, but more by 5-10% range rather than the 20+% some had predicted.
However, stats since the rise in base rates to 5% are starting to dampen the efforts of even the hardiest of buyers and sellers and, in most places, we’ve seen a drop in sales since the rate rise.
This is likely to be similar to the drops we saw post the Liz Truss debacle and hopefully it will only impact for a few months over the summer while people ponder their next stage in life. I think then we will see the market recover a bit and then fall back again towards Xmas. But, this is more based on a gut feel than robust evidence!
During this time there will be lots of media reports about the property market taking a downturn ‘on average’ and any more rate rises will stoke the fear of affording a mortgage. So it’s vital that as an industry we pull together to help inform buyers and sellers of how to survive the higher-rate mortgage problems people are having to adjust to, and what’s happening at a local level – especially if it’s different to the average.
What information do we need to be giving to buyers and sellers?
A good starting point would be to send out the new infograph from DLUHC which helps explain the support that is available to how owners. We need to encourage them to talk to their lender or broker for help as soon as possible – ideally at least six months before their fixed rate ends.
In addition, if you have brokers that are doing a great job at helping people, you can do some case studies of how you have helped them as this should encourage others to make contact.
Sellers who price right for the first time, rather than starting too high, have a much better chance.
Secondly, understanding how your local market for individual property types is performing versus the national averages is as essential as always. These charts from Chris Watkin shows that not everywhere is suffering falls.
Finally, we need to make sure that those that want to sell are pricing correctly. According to Rightmove’s latest index:
“Sellers who price right the first time, rather than starting with too high an asking price only to reduce later, have a much better chance of attracting one of these motivated buyers, and a good local agent will provide sellers with accurate evidence of prices that are being achieved in their area.” Tim Bannister, Rightmove’s Director of Property Science.
Our job is to help people put roofs over their heads when they need – or want to move, and during tricky times we all need to double our efforts to help show people that achieving their next move is still possible if it’s financially safe for them to do so.