House hunter enquiries slump 13% in March, Zoopla warns
Uncertainty about the economic situation created by war in the Middle East has hit buyer confidence, says research chief, Richard Donnell.
Property buyer demand has slumped 13% this month amid uncertainty about the global economic situation, the latest Zoopla house price index reveals.
The portal says “rising mortgage rates and uncertainty impacted confidence”, although sales agreed are only down 2%.
Growing gap
There is a “growing gap between sales agreed and buyer demand”, which is “the key theme in March”, Zoopla says.
The year-on-year figures show buyer enquiries dropped 13%, with average mortgage rates up 0.4% in recent weeks.
In fact, Zoopla’s data shows that buyer demand has been running below last year’s levels through the first three months of the year, with demand weakening further in March.
Trends in sales and buyer demand are replicated across the country, and there is no difference between first-time buyers and existing homeowners.
Largest decline
Buyer enquiries have decreased by between 7% and 19% year-on-year, with the largest decline in active buyers recorded in the North East and West Midlands, albeit with enquiries falling off a high base compared to last year.
And house price inflation is stable at +1.3%, Zoopla says.
The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers.”
Richard Donnell, Executive Director at Zoopla (pictured), says: “The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers.
“Some early stage buyers are adopting a wait and see approach, but there is a sizeable group of committed buyers who are pressing ahead with housing purchases,” he says.
“If mortgage rates stabilise at current levels we expect sales activity to continue to hold up well compared to last year.
“For buyers, there is less competition and more choice, but affordability is becoming more stretched.”
Industry reaction
Tomer Aboody, Director at MT Finance, says: “While committed buyers and sellers – who have their finance in place and have a clear desire to move – continue with their plans, those earlier on in the process are increasingly adopting a ‘wait and see’ approach due to wider geopolitical uncertainty, the threat of rising inflation and higher interest rates.
“While the average house price remains steady, the fall-off in demand is of far greater importance. We have seen a lack of desire from the government to help kick start or boost the property market, and if anything, it has helped create even tougher conditions.”
Our buyers and sellers seem shaken but not stirred.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: Although we may have feared the worst, bearing in mind the turmoil in the world and uncertainty over direction of travel for interest rates and inflation, so far the overwhelming majority of our buyers and sellers seem shaken but not stirred.
“There is no question the number of enquiries has dropped, but the more serious buyers and sellers seem keen to get on with their moves. Worries about higher costs have inevitably filtered down into negotiations but so far a sense of realism is prevailing.”
