Market recalibration
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.
Price correction
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 South West and South East the time taken to sell a property has nudged upwards over the past month. However, at 37 and 41 days respectively, they remain considerably less than 65 and 69 days in October 2019 (Rightmove). Swindon and Hart are currently the most active property markets in the region.
9%, 9%, 9%
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 South East and South West the number of households increased by close to 440,000 and the population by just over 1 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
Properties for sale in the Southern region
Southampton, Hampshire, 4 bedrooms
A superbly renovated, four-bedroom, semi-detached period home set within large established gardens. This beautiful property has been extensively renovated and thoughtfully extended to offer an attractive blend of character features and modern finishes. The property offers extensive accommodation arranged over three floors. On the first floor there is a spacious landing with study area, three bedrooms, two with en-suite facilities and a modern family bathroom. The second floor also offers a large double bedroom. Outside there is a large driveway, wonderful gardens, a purpose-built office/studio, stables and a workshop.
Bere Regis, Dorset, 4 bedrooms
Welcome to Stanbarrow Farmhouse, a beautiful four-bedroom family home standing proudly in the heart of the lovely village of Bere Regis. The original part of the farmhouse is understood to be approximately 200 years old, and the house has many of its lovely original features. Stepping into the light hallway you can feel the history as the house welcomes you in. The property benefits from four bedrooms, two bathrooms and two reception rooms.
Chippenham, Wiltshire, 4 bedrooms
A magnificent barn conversion with four large bedrooms and lovely gardens, offering flexible accommodation over three storeys. Situated in the heart of the village, this characterful home comes complete with an unconverted stable block and double garage at the end of the long private driveway.
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