The housing market remains subdued, with buyer demand weakening and sales continuing to lag behind last year’s levels as higher mortgage rates and political uncertainty weigh on confidence.
New figures from Zoopla show three in five homes listed for sale since January remain unsold, while sales agreed over the past four weeks are down 7% year-on-year. Buyer demand has fallen 15%, contributing to a slowdown in house price growth to 1.4%, with values continuing to decline in London but rising across much of northern England.
Housing market stalls as buyer demand drops sharply – Property Industry Eye
Industry reactions:
Jeremy Leaf, north London estate agent: “A combination of too much property on the market across various price ranges, as well as continuing uncertainty about the protracted war in Iran and the subsequent impact on the economy, is proving lethal as far as homebuyer and seller confidence is concerned.
“Sales are taking much longer and it is proving increasingly difficult to generate commitment. However, the overwhelming majority of sales which have been agreed are proceeding, although inevitably more slowly and suffering relatively few price negotiations.
“This is likely to prove the ‘new normal’ at best, looking forward, particularly now that domestic political uncertainty is another factor to consider.”
Tom Bill, head of UK residential research at Knight Frank: “A summer of tax speculation could stifle demand in the housing market for the second year running. After the seasonal spring bounce this year was cut short by higher mortgage costs arising from the Middle East conflict, it means buyers and sellers may not get a chance to properly catch their breath. The uncertainty is not limited to what will be contained in the Budget, but the identity of the Chancellor and the credibility of wider ambitions to reform property tax, many which are based on plans that are unachievable for a number of years.”
Nigel Bishop of buying agency Recoco Property Search: “House hunters remain cautious amid the UK’s volatile economy and with interest rates remaining at 3.75%, the market won’t be seeing a spike in buyer activity any time soon. Particularly those who aren’t in a rush to move, will rather wait until the market has stabilised or rates have come down.”
Nathan Emerson, CEO of Propertymark: “Economic and political uncertainty will always influence confidence, but people continue to move because of changing jobs, growing families, retirement and other life events that cannot simply be put on hold indefinitely.
“Property professionals are continuing to see healthy levels of enquiries and viewings, but many buyers are taking longer to commit and are carrying out more research before making an offer. Confidence has softened rather than disappeared, making realistic pricing and expert local advice more important than ever.
“Today’s figures also reinforce that there is no single national housing market. Conditions vary considerably from one area to another, and local agents play a vital role in helping buyers and sellers navigate changing market conditions and keep transactions progressing.“
Marc von Grundherr, director of Benham and Reeves: “Affordability has become the defining force in today’s market and it’s no coincidence that London is feeling the greatest impact. Higher mortgage costs, coupled with already elevated purchase prices, mean buyers are taking longer to commit and becoming far more discerning.
“The market is still moving, but sellers can no longer rely on yesterday’s pricing and timeline expectations. Those who price sensibly from the outset will continue to attract serious buyers, while those chasing last year’s values risk watching their property linger on the market. As for prime markets and higher-end properties, these tend to follow their own market rules, which means good properties, marketed by good agents, will still benefit from steady buyer demand.”
Verona Frankish, CEO of Yopa: “Today’s figures show that while the housing market hasn’t ground to a halt, buyers are undoubtedly becoming more selective as higher mortgage rates continue to stretch affordability.
“With more homes competing for attention and sales taking longer to agree, sellers need to recognise that pricing correctly from day one is more important than ever. Overpricing in the hope of negotiating later is far more likely to result in a property sitting on the market while better-priced homes secure buyers.
“The good news is that demand hasn’t disappeared. Motivated buyers are still moving, particularly where sellers are realistic and supported by accurate local market knowledge. In the current market, the right pricing strategy remains the single biggest factor in achieving a successful sale.”
Chris Hodgkinson, managing director of House Buyer Bureau: “While market conditions have undoubtedly become more challenging, we’re far from seeing the sort of freeze witnessed after the 2022 mini-budget. Buyers are still active, but they’re taking a far more measured approach and won’t be rushed into paying over the odds.
“For sellers, this means speedy sales are no longer guaranteed on the open market, and will be powerfully influenced by price expectation. Those willing to price competitively are still achieving sales, while those who are determined to get as much as possible for their property are spending longer than usual on the market.”
Comments (1)
When did the housing market become the stock market. Most sales are about people wanting a home to live in. When news just relates to how much it’s going to go up or down in value, some people become nervous about buying a home. Over the last 40 years this seismic change in how so many people and news outlets view homes has just encouraged greed. Such a shame.