Higher mortgage rates and political uncertainty hit sales
Sales agreed over the last four weeks are 7% lower than last year, with buyer demand also falling, by 15% year-on-year, leaving three in five homes listed for sale since January still on the market, according to the latest Zoopla House Price Index.
It said that higher mortgage rates and political uncertainty meant some buyers were taking a wait-and-see approach until stability returns.
Fall in sales agreed varies by area
The fall in sales agreed was more modest in Northern regions and Scotland, with decreases of between 3-6%. However, Wales (-12%), East Midlands (-11%), East of England (-10%) and South West (-10%), have seen the largest fall in sales agreed, with the West Midlands seeing the steepest decrease in buyer demand, down 30% YoY, closely followed by the North East down 29%.
The data shows that two- and three-bedroom houses are selling at a similar rate to last year, but one and two-bedroom flats remain the weakest, with more than two-thirds listed this year still unsold.
UK house price inflation has edged lower to +1.4% YoY, with London facing its ninth consecutive month of negative annual house price growth at -0.2% in May.
Richard Donnell, executive director at Zoopla, said: “It’s a buyer’s market across much of the South right now, but motivated sellers in northern England and Scotland are still finding buyers at broadly last year’s pace, which shows the housing market is not moving at one speed.
A conversation about price
“For sellers still waiting for an offer, the conversation to have is about price. Correctly priced homes are selling, while overpriced homes are sitting. For buyers, rates are falling, there is more choice of homes for sale than a year ago and motivated sellers are willing to negotiate. If you are ready to move, conditions are more favourable than they were three months ago.”
Nathan Emerson, CEO of Propertymark, said he also remained positive. “Economic and political uncertainty will always influence confidence, but people continue to move because of changing jobs, growing families, retirement and other life events that cannot simply be put on hold indefinitely,” he said.
“Property professionals are continuing to see healthy levels of enquiries and viewings, but many buyers are taking longer to commit and are carrying out more research before making an offer. Confidence has softened rather than disappeared, making realistic pricing and expert local advice more important than ever.
“Today’s figures also reinforce that there is no single national housing market. Conditions vary considerably from one area to another, and local agents play a vital role in helping buyers and sellers navigate changing market conditions and keep transactions progressing.”