Market Comment (September 2022)
A monthly round-up seems insufficient to keep pace with changes in UK life these days. Not everything major happening in the country impacts the property market, but so much of it does, and we’ll do our best to keep you informed as to what is happening for buyers and vendors.
Asking prices rose in September 2022
According to Rightmove, the average asking price for a property increased by 0.7% in September, reaching a level of £367,760. Given there was a fall of 1.3% in August, this suggests a change in direction in the market. When considering the annual movement, property prices rose by 8.7%.
Analysis of the markets indicate the increase in price is driven by the middle to high-end sectors.
There is a suggestion that second-steppers, existing homeowners looking for larger homes, are behind this movement. The average asking price for these properties rose by 0.5%, reaching a record level of £340,513.
Tim Bannister from Rightmove said; “These numbers suggest that for those who can, moving up the ladder to a home with more space remains a priority, even at a time when personal finances are stretched.”
A mini-budget leads many to think about property market changes, and it’s inevitable some people’s ambitions in the market will change. There’s plenty of concern at the moment, with rising interest rates the hot topic, and understandably so.
Do stamp duty changes help first-time buyers?
The market needs first-time buyers to ensure second-steppers can move on, but with rising prices and higher interest rates, there are concerns about the level of support on offer to first-time buyers.
The stamp duty changes are:
The threshold is increased from £125,000 to £250,000
The threshold for first-time buyers has increased from £300,000 to £425,000
Chancellor Kwasi Kwarteng spoke in the House of Commons, saying; “Home ownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society. This is a permanent cut to stamp duty, effective from today.”
On paper, these increases are great news, but of course, the majority of first-time buyers were already well-served by the £300,000 threshold. Increasing the first-time buyer threshold to £425,000 will benefit buyers in London and the South East of the country, but it isn’t likely to change much across the rest of the country.
Information provided by Rightmove says a 10% deposit for a first-property style house is 57% higher than it was a decade ago. In the same time, average salaries have increased by 32% in this time.
This suggests it is harder for first-time buyers to step onto the property ladder, but Rightmove doesn’t believe this will hamper buyer demand too much, in the short-term at least.
Tim Bannister also said; “If it does lead to a big jump in prospective buyers competing for the constrained number of properties for sale then it could lead to some unseasonal price rises over the next few months. But because the change is permanent, and because of gathering headwinds such as rising mortgage rates, we expect to see a more gradual increase in demand compared with the surge when the temporary stamp duty holiday was announced in 2020.”
By the time next months article comes around, the picture may look a lot different to what it is now.
Can we help?
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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