A drop in valuations and viewings indicates a shift in market appetite, but housing market activity remains on a par with 2022 levels.
An average of 64 new prospective buyers registered per estate agency branch in July 2023, according to Propertymark’s latest housing insight report. Although this is a dip on the busy month of June, which saw 86 new househunters registered per branch, it is roughly the same figure as last year’s results.
With the housing market now facing higher interest rates and affordability constraints, the latest report shows an overall level of resilience and strength in the sector, with Propertymark pointing out that the most serious buyers and sellers are remaining active.
Viewings have dipped, according to the report, after peaking earlier this year in April. Last month, the average number of viewings per property listing among Propertymark’s member branches was 1.5 in July – a fall from three in June.
Valuations have also seen a very small decline, down to an average of 21 per member branch in July compared with 22 in June.
The report notes: “This indicates that those looking to buy are determined to do so and are acting quickly to secure their property.”
Uplift in sales in July’s housing market
In another sign of strong ongoing demand in the UK housing market, the report found that the number of sales agreed in July actually increased to eight, up from seven in June. New instructions also increased in the month, with an average of 10 new homes put up for sale per member branch.
This coincided with a rise in available housing stock on the market, with the average member branch recording a total of 38 properties available in July, up from 32 in June. Annually, this represents a 37% hike in stock available, bringing it to its highest level for a year.
The much-needed housing boost gives buyers more choice and eases pressure in the housing market, while “proving that resilience and determination to move home remains”.
Rental supply fails to keep up with need
The number of tenants seeking property in the rental market continues to rise, with this increase in demand not being met by the level of housing supply across many parts of the country. This is putting pressure on tenants, while causing rents to continue to rise.
According to Propertymark, there was a “sizeable jump” in the number of new prospective tenants registering at member branches, with an average of 187 per branch newly registering in July. This compares with 127 in July 2022, and the increase is “predicted to show no signs of slowing”, says the report.
At the same time, there was a welcome increase in the number of homes to rent per member branch, with an average of 14 in July. However, this falls well below the number of tenants looking for rental homes in the UK housing market, with the mismatch showing no signs of abating.
Rents appear to be continuing to climb across many parts of the UK’s rental sector, with this report showing that 70% of member agents had reported a month-on-month rise in average rents at their branch in July. However, Propertymark notes this is down from 74% in July 2022.
Lettings market shows “alarming disparity”
Nathan Emerson, CEO of Propertymark, said of the latest housing market figures: “In the lettings market, we continue to see an alarming disparity in the number of homes available to rent when compared with growing demand from prospective tenants.
“The number of prospective new tenants is up by 38 per cent in July compared to the same time last year, yet the number of properties available per member branch has risen by only 24 per cent meaning this gap is continuing to widen from already worrying levels.”
Emerson went on to urge the government to take action to bring more landlords and properties to the rental housing market in the UK, stating: “This mismatch in supply and demand is putting pressure on rents with six per cent of tenants per member branch falling into arrears doubling compared to February 2023.
“Governments across the UK need to urgently address the fundamental problem of undersupply and look to adequately incentivise the provision of desperately needed homes in the private rented sector.”