Q2 Market Update
We explore the sales and lettings markets both nationally and regionally over the last 3 months to give you an update on quarter two of 2023.
Rightmove’s latest June report highlights how the sales market has been encouragingly positive for our region, with the southeast outperforming the national average, witnessing a modest monthly increase of 0.2%, with an average property price of £495,711. Despite recent rises in mortgage interest rates, buyer demand remains unaffected, according to Rightmove's latest statistics. In fact, demand over the past two weeks is reported to be 6% higher than the same period in 2019, suggesting a robust market. However, industry experts caution that sustained increases in mortgage rates could impact affordability and potentially lead to a balance between buyers and sellers.
Rightmove's Director of Property Science, Tim Bannister, highlights the importance of adaptability in the current market conditions. Those who enter the market with a competitive price have a higher likelihood of finding suitable buyers swiftly and negotiating favourable terms for their onward purchase. The emphasis is on avoiding a prolonged listing, which could make a property appear stale.
We can see from our own data that the number of properties coming to market in the last three months compared to the same time last year is not too dissimilar – 280 properties compared to 2022’s 292 properties. This shows that the seller’s desire to move is still very much present, and has hardly been affected by things like the mini budget or increased mortgage rates.
Potential Impact of Mortgage Rates for buyers:
Zoopla, another prominent property platform, acknowledges the significance of rising mortgage rates on buyers' ability to secure financing and purchase homes. As mortgage rates move above 5%, it becomes increasingly challenging for individuals to qualify for mortgages, potentially resulting in a slowdown in the property market. However, the impact of higher rates may be offset by falling energy bills and rising earnings, which can help sustain buying power and balance the effects of these changes. If you have any questions regarding your mortgage, we have our very own in-house advisors here to help. Speak to them today.
In May 2023, the UK rental market continued to experience strong demand for rental properties. This demand is primarily driven by shifting demographics, affordability challenges in the property market, and the flexibility associated with renting. While the market sustains consistent demand, the supply of rental properties has struggled to keep up, leading to a highly competitive environment.
Throughout the last 3 months of 2023, and in a continuing longer term trend, the average rental prices in Sussex have steadily risen, reflecting the high demand for properties in the region. The region's proximity to London, excellent transport links, and desirable lifestyle have all contributed to Sussex becoming a prime rental destination. That said, rental growth has eased slightly, as tenants seek to balance their income and the increased cost of living.
HMO sector is growing:
A growing area of demand is quality shared accommodation for working professionals, predominantly in Houses of Multiple Occupancy (HMO) properties that have been refurbished and equipped to a high standard. Tenants of these properties seek quality and spacious living and kitchen areas where they can socialise and entertain, as well as having a private space to call their own. Our teams are available to guide landlords as to how best to present properties for this market and maximise returns.
Despite minor fluctuations in average seller asking prices, the UK property market remains resilient, with buyer demand surpassing pre-pandemic levels. Sellers who adapt to the current conditions and price their properties competitively have a higher chance of achieving swift sales. While rising mortgage rates pose a potential risk to the market, factors such as declining energy costs and improving earnings may mitigate their impact. As the landscape continues to evolve in both the sales and lettings markets, it is crucial for buyers, seller, landlords and tenants to stay informed and navigate the market strategically to make the most of the prevailing conditions.
Have you got a sales or lettings question? Contact your local branch today.