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 West Midlands the time taken to sell a property has nudged upwards over the past month. However, at 36 days it remains considerably less than 55 days in October 2019 (Rightmove). Telford and Wrekin, and Rugby 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 West Midlands the number of households increased by nearly 135,000 and the population by nearly 350,000. Early 2023 will see the release of new census information reflecting how the number of homes 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 well-presented and spacious four-bedroom family home benefits from two en-suite bedrooms, a further two bedrooms to the first floor, two reception rooms and a delightful kitchen. Externally, there is a detached garage and off-road parking for two vehicles, as well as a fully enclosed rear garden set over two levels.
Located in the popular village of Barton Seagrave, this beautifully presented four-bedroom detached home features a large open-plan kitchen/diner with integrated kitchen appliances, and a spacious, private rear garden. This property is located in a popular area, close to great local schools, amenities and with good access to all the local link roads.
This sensational hidden house is one many have passed without even noticing, as it is sat privately behind a lovely Beech hedge. Wonderfully presented throughout, the four-bedroom property benefits from a generous plot, feeling rural but with the added bonus of easy commuter links. With lush, manicured lawns, mature shrubs and trees and flowers in abundance, the landscaped garden is a real highlight of this home.
Sell your property with your local expert this winter. Contact your local Guild Member today.
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