The average price of property coming to the market has started to stabilise
The housing market has endured an extended period of volatility over the past few years, however one expert has claimed this might be coming to an end.
The average price of property coming to market has started to stabilise, which Nick Huntley (pictured), head of sales at Smoove, said is a welcome development in what has been a rather tumultuous period for the UK property market. Indeed asking prices rose just £14 to £362,452 on a monthly basis, according to the latest report from listing platform Rightmove.
Period of volatility over?
Huntley said the market has suffered from the never-ending effects of the pandemic, the government’s mini budget and interest rate rises, however he believes it seems these stimulants are reaching their expiry date.
“In their place, falls in mortgage rates, the introduction of flexible mortgage products, improving consumer confidence, alongside a steady number of new properties entering the market and the resilience of the labour market, can be thanked for this positive change,” he said.
He believes the fast pace of these monthly corrections is a symptom of a normalising market, not a sliding one.
Huntley added that although prices have remained flat according to the latest data, this is also in fact a positive indicator for the year ahead.
As mortgage rates surged and interest rate rises peaked at the end of last year, he said the rate of property price growth was always expected to stall at some point. While Huntley is expecting this trend to continue over the course of the year, he believes it will be at a slower speed.
“It is important to note that this assimilation is also indicative of sellers pricing their properties in line with estate agents’ advice, a positive sign that buyers and sellers are beginning to adjust to the ‘new normal’ transaction environment,” Huntley said.
He added that as well as market conditions forcing buyers and sellers to be more realistic on price, he believes the market is moving at a slower pace as it finds its ‘new normal’, with buyers assessing their potential new purchases in greater depth due to higher mortgage costs.
“I am interested to see how this translates into agreed sales, and ultimately, completed transactions as we head into the spring selling season,” Huntley said.
Housing market - expectations for 2023
While Huntley believes the outlook for the property market in 2023 is a positive one, he said the challenging macroeconomic environment will continue to have an effect on the decisions of buyers and sellers.
“As with every spring cycle, the property market will prepare for an uptick in activity, although at comparably lower rates than previous years,” he said.
Huntley said the spring selling season will be another key indicator of whether sellers are adjusting their expectations to this new environment, and whether it will lead to completed transactions.
Moreover, Huntley added that house price stability will signal to the government that there is no immediate fire to put out, so he believes it can be expected that the spring statement will not include any significant support or relief for consumers.
“While the market may be able to sustain comparatively positive momentum throughout the rest of the year, a shrinking economy and struggling labour market may pose more challenges than anticipated later down the road,” he said.
Do you believe that the tough market conditions seen over the past few years are coming to an end? Let us know in the comment section below.
