The UK housing market is in better health than many had forecast at this point in the year, and appetite for property remains fierce across many parts of the country.
From buyer and seller numbers, to price and length of time it takes to sell, there are many ways to take the temperature of the property market during these changing times. As a buyer, it is often important to read past the attention-grabbing headlines to find a clearer picture.
A good example of this can be seen from the various house price indices, where Nationwide seemed to report sliding prices while Halifax found that prices had in fact risen “unexpectedly” for the third month in a row in March. But there is much more to the UK housing market than minute-by-minute price differences.
Another source, Zoopla, has revealed in its latest index that the UK property market is actually more balanced than it was in 2019, before it was impacted in various ways by the Covid pandemic, the war in Ukraine and the cost of living crisis.
So while the current situation certainly looks like a rebalancing after months of high-speed transaction levels and soaring prices – average house prices have shot up by approximately 25% since the start of the pandemic – there are many markers in the sector that still show a strong market.
UK housing: is it selling?
According to the figures from Zoopla’s latest index, the number of sales being agreed across the UK housing field is now 11% higher than pre-Covid levels in 2019, which would represent a “normal” time period.
So although the number of sales agreed in February was 16% below the level we saw last year, this is another sign of a correction to a more stable, manageable market. Last year was also significant for the property market’s shortage of supply compared with huge demand.
Zoopla’s report shows there are now 65% more properties for sale across the UK housing market than there were this time last year, which improves the level of choice available to buyers. The average discount sellers are currently accepting is 4%, or £14,000, from the original asking price.
Another comparison between the current market and 2019 is in the time it takes to sell. It is currently faster to sell a property than it was pre-Covid across the UK housing market as a whole, although as ever there can be major regional and city-wide variations to this figure.
Does home-working still play a part?
The needs and desires of people seeking properties – in both the rental and the sales space – still look different now in many respects than they did before the pandemic hit. A huge factor influencing this was and continues to be our work-life balance and the amount people commute to the office five days a week.
Zoopla found that many office-based employees are still working from home an average of one to two days a week. This affects where the demand is, as people may be more willing to look on the outskirts of cities because they don’t need to prioritise transport quite as much as before.
The cost of living crisis also continues to impact the most popular property types in the UK housing sector, too, and again this applies to both buyers and tenants. There has been a particular rise in interest in new-build flats, which are smaller and more energy efficient, making them cheaper to live.
Richard Donnell, Executive Director at Zoopla, says: “The housing market is arguably more balanced than it has been for more than three years. Levels of supply have recovered and buyers and sellers are not miles apart on where they see pricing and this means deals are being agreed upon at an increasing rate.
“Prices are drifting lower compared to a year ago but fears of a major downturn in prices are overdone. Falling mortgage rates and a strong labour market are supporting activity levels from committed movers who need to be realistic on price if they are serious about moving home in 2023.
“We expect to see levels of activity continue to steadily improve over Easter and into the summer and H2.”
