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Have we turned the corner?

Have we turned the corner?

Despite the many headwinds the property market has faced in 2023, it has held up well. Prices and activity levels have fallen, but not nearly as much as many expected. Now, with inflation slowing, mortgage costs coming down sooner than expected and employment levels remaining steady, it is beginning to show signs of a recovery.

Nationwide’s index rose for the third month in a row in November, with house prices up 0.2%, following a 0.9% rise the previous month. Halifax’s index was up for the second month in a row, with prices up 0.5% and by an even more impressive 1.2% in October. Activity levels are improving, too. In October, agreed sales were 15% below their pre-pandemic levels (2019) but, by November, that figure had gone to 10%. The number of mortgage approvals and valuations are also increasing. And, after a prolonged period of stock shortages, the number of homes for sale is just 1% behind its more usual levels (Rightmove, 2019), providing buyers with considerably more choice than there was during the pandemic.

Kim Kinnaird, Director, Halifax Mortgages, says:

“Recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers. With mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.”

However, the improving outlook does not mean we are about to enter into a boom period. The market is still operating more in favour of buyers than sellers and, according to Rightmove, asking prices dipped last month, as sellers tried to tempt buyers into making an offer before Christmas. It was slightly more than the usual seasonal fall, which Rightmove claims is the result of sellers’ more realistic attitudes to pricing.

Nor is the recovery evenly spread, with smaller properties faring far better than larger ones. The number of sales agreed for studio, one and two-bed properties is just 7% behind 2019’s levels. Four and five-bed homes, in contrast, are 14% behind. There were also some quite wide regional variations. In November, asking prices were down by as much as 3% in the Southeast, by 2.3% in Yorks and Humber and by 2.1% in London but in the West Midlands and the North West they were down by only 0.5%.

House prices and statistics

All the most up-to-date indices’ annual house price figures are now showing signs of a recovery, with the falls from their frothy 2022 peak reducing month-by-month.

Nationwide: Nov: Avge. price £258,557. Monthly change +0.2%. Annual change -2.0%
Halifax: Nov. Avge. price £283,615. Monthly change +0.5%. Annual change -1.0%
Land Registry: Sept: Avge. £291,000. Monthly change -0.5%. Annual change -0.1%
Zoopla: Oct: Avge. price £261,100. Annual change -1.2%
Rightmove: Nov: Avge. price £362,143. Monthly change -1.7%. Annual change -1.3% (asking prices on Rightmove).

If you are considering taking advantage of the more benign market conditions and want to buy as early as you can in the cycle, then why not take a look at all the fabulous homes we have coming up in our next auction at Phillip Arnold Auctions.

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