Market Comment (August 2024)
Football is back, schools are nearly back and even though we didn’t have much of a summer, it will soon be autumn. This is a busy time of year for many people, and a period of great activity in the housing market. If you want to make sure you are up to date with what is happening, stay in touch with Trading Places.
Bank rate cut inspiring activity in UK housing market
The latest market update from Rightmove indicates that the average asking price for properties newly listed for sale has experienced a seasonal decline of 1.5% this month, equating to a decrease of £5,708, bringing the average price to £367,785.
This dip in prices during August is a consistent trend, having occurred every year for the past 18 years, with this year’s reduction aligning closely with the long-term average.
The summer holidays are typically a quieter period in the property market, as many potential buyers pause their search to focus on holidays and spending time with family. Consequently, sellers who list their properties during this time often have a more urgent need to sell, prompting them to set more competitive asking prices.
Interestingly, this year’s summer market shows a notable uptick in buyer interest compared to last year, when higher mortgage rates were a significant deterrent. As predicted in Rightmove’s July report, the recent Bank of England rate cut—the first in four years—has led to a reduction in mortgage rates, which in turn has boosted buyer demand.
These more favourable market conditions are paving the way for a strong Autumn market. In light of the rate cut, Rightmove has revised its forecast for 2024, now predicting a 1% increase in new seller asking prices for the year, rather than the previously expected 1% decrease.
For those considering buying or selling in Leytonstone, and London in general, this could be an opportune moment to take advantage of the renewed market activity. Whether you're looking to sell your property quickly or are eager to purchase before prices potentially rise, the current market dynamics are worth keeping in mind.
Rightmove’s Tim Bannister said: “The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity. While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment. As the summer holiday season comes to an end, the conditions are there for a more active autumn market.”
Tim Bannister concluded by saying: “The reaction from home movers to what is hopefully only the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price prediction for the year. We now expect new seller prices to rise marginally by 1% over the whole of 2024. This is a relatively small revision from our original prediction of a 1% fall in prices over the year, since we didn’t initially forecast anything more drastic than a slight drop in prices this year.”
Downsizing households are driving the market forward
Downsizers are playing a significant role in alleviating the UK's housing crisis, with new data revealing that they are contributing an average of 343,000 bedrooms back to the market each year. This insight comes from a recent analysis by Quickmove Properties.
In 2023, Quickmove Properties estimated that downsizers were responsible for 32% of all property transactions across the UK. With a total of 718,127 home sales recorded that year, this translates to 229,621 sales attributed to those looking to move into smaller properties.
The impact of these downsizers is substantial. According to a recent survey by Quickmove Properties, 65.1% of those downsizing gave up one bedroom, while 24.7% relinquished two bedrooms. Smaller but still significant percentages involved downsizers giving up three, four, or even five bedrooms. By applying these survey findings to the total number of downsizer sales in 2023, it’s estimated that a staggering 342,824 bedrooms were returned to the market.
This influx of available bedrooms has the potential to significantly benefit young families and those looking to move into larger homes, helping to ease the pressure on the housing market.
Regionally, the South East leads the way, with downsizers contributing an estimated 52,993 bedrooms back to the market. Other regions also saw notable contributions, with the South West adding 36,754 bedrooms, the East of England 35,213, the North West 33,218, and Scotland 28,502.
For those in London considering downsizing, this data highlights the positive impact such a move can have on the broader housing market, not to mention the personal benefits of moving to a more manageable home.
Whether you're looking to sell a larger property or searching for a home that better fits your current needs, the contributions of downsizers are making a real difference in the market.
Sales Director at Quickmove Properties, Mark O’Dwyer, said: “Downsizers play a huge part in the property ecosystem. The market needs older property owners to downsize their family homes – perhaps once their kids have fled the nest – so that these large properties can be made available for the young families who need them. This market churn keeps everything moving, and helps bring balance to the market. Whatsmore, the extra space that downsizers put back onto the market supports our battle to overcome the ever-present housing crisis.”
We make sure you make an informed move
If you would like to learn more about Leytonstone, what the area has to offer, and how to achieve your goals in the local property market, we can help. To arrange an appointment, call us on 020 8558 1147 or send us an email at info@tradingplacesproperty.com
You will find Trading Places Estate and Letting Agents at 46 Church Lane, Leytonstone, London, E11 1HE; and we look forward to assisting you.
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