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Posted on: Friday, December 9, 2022
Price moderation and a sales slowdown are likely over the coming months but should be considered in the context of economic history, the frenzied post-pandemic market and the longer-term outlook.
The Autumn Statement provided a sobering assessment of the UK economy, but forecasts for the housing market are less dramatic than during 1989-1993 and the Global Financial Crisis in 2007. Inflation is expected to peak during the final quarter of 2022 before falling back over the course of 2023, and unemployment looks likely to remain lower than the 10-year average (5.3%)¹. The Global Financial Crisis, caused by banks lending more than borrowers could afford to pay, led to the more stringent mortgage lending criteria imposed since 2014. Today, only an estimated 4.2% of homeowners have less than 10% equity in their home².
Property price growth is moderating and price correction is forecast. At 7.2% in the year to October, annual price growth remains considerably stronger than the 3.3% average between 2010 and 2019ᶟ. Since June 2020, average property prices have risen by close to £50,000, the equivalent of 24%, with lockdown and lifestyle changes spurring the market. Single-digit price correction is predicted for 2023/2024 before price growth is anticipated to return in 2025⁴. Buyers will continue to benefit from the 0% rate of stamp duty up to £250,000 until March 2025. With almost one in three movers ‘needs-based’⁵, such buyers will present sales opportunities.
2022 is set to be the busiest market since 2017, with the exception of 2021. Zoopla estimates there are around 293,000 sales currently in the pipeline to be completed before the end of the year. Sales volumes are predicted to be around 1 million in 2023, a level more on par with the pre-pandemic norm (Zoopla, JLL). October saw a 13% uptick in new supply to the market compared to a year ago, although stock levels remain low by historic standards (RICS).
Across the East of England the time taken to sell a property has nudged upwards over the past month. However, at 40 days it remains considerably less than 66 days in October 2019 (Rightmove). Fenland and Central Bedfordshire are currently the most active property markets in the region.
Average property prices are expected to end the year 9% higher than where they started, but this growth is set to be countered by a 9% fall in property prices over the course of 2023/2024. House price growth of 9% is then expected over the course of 2025 to 2027¹. While such predictions will undoubtedly impact the market, almost one in three movers are ‘needs-based’, prompted by personal circumstances and job changes. These people will still need to buy and sell property.
The decade to 2021 saw the population of England and Wales grow by 3.5 million and the number of households by 1.4 million. In the East of England the number of households increased by nearly 206,000 and the population by close to half a million. Early 2023 will see the release of new census information reflecting how the number of private dwellings across the region has changed.
¹Dataloft, ONS, Office for Budget Responsibility, 10-year average 2010-2019, ²JLL ᶟDataloft, Nationwide, ⁴Office for Budget Responsibility, ⁵Dataloft, Property Academy, survey of 10,000 home movers 2022
This remarkable family home faces the award-winning Central Park and benefits from mainline rail links to London Kings Cross. Built in 2017 by an award-winning builder, the house boasts a high specification and contemporary design. There are five bedrooms in total, four of which are en-suite, as well as three reception rooms and a kitchen/diner.
This detached four-bedroom, two-bathroom house is located at the end of a quiet residential turning, offered for sale with no upper chain. Though well-proportioned, this fine family home does offer scope for extension, subject to the usual consents, and enjoys a secluded mature rear garden with a south-westerly aspect backing onto open space. The accommodation includes a lounge, dining room, garden room, kitchen/breakfast room, a well-stocked front garden, a garage and a charming rear garden.
This five-bedroom property enjoys light and airy family accommodation with generous rooms throughout. The home provides a versatile living space, ideal for modern-day living. The accommodation includes a dual-aspect living room with a feature fireplace, a family room and an additional home office/study, and a trendy cottage-style kitchen/dining room with underfloor heating, Belfast butler sink and 'Classic' range oven with a five ring gas burner hob.
Sell your property with your local expert this winter. Contact your local Guild Member today.
