"Some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end. This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass market"
- Tim Bannister - Rightmove
The latest market analysis from Rightmove has revealed that the price of a typical property coming to market dipped by just £21 this month (0.0%) to £375,110.
Pricing remains varied across Great Britain, with the strongest price growth this month seen in the less expensive and more northerly regions. According to the data, five of the six cheapest areas are reaching new price records. By contrast, the higher-priced East of England and London regions lag and see this month’s only regional price falls.
Now that a General Election has been called, analysis from Rightmove suggests that activity is largely remaining stable, with the market maintaining its 2024 momentum. The number of sales being agreed upon and the number of buyers sending enquiries to agents remain steady, with the vast majority of those already in the home-moving market continuing with their plans.
Election caution
One exception is possible election caution among some would-be sellers, which is most pronounced for those at the typically more discretionary top end of the market, some of whom appear to be pausing their plans to see how the next few weeks unfold.
Rightmove’s Tim Bannister comments: “It’s always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady.
"This election has followed a similar pattern so far, and the responses from our poll of over 14,000 people also support the data, with the vast majority of respondents saying they will carry on with their home-moving plans.
"However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end. This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass market.”
Over the last four weeks, the number of sales being agreed between buyers and sellers has remained stable at 6% above the same period last year, emphasising that those in the market are generally continuing with their plans despite the surprise General Election.
Buyer demand, as measured by the number of people contacting estate agents about homes for sale, has also remained steady and is currently 5% higher than last year.
However, one area of activity that does appear to have seen some impact from the election being called is the number of new sellers coming to market, mainly due to some hesitancy at the top end.
In the last two weeks, the overall number of new sellers coming to market is just 1% higher than the same period a year ago. By contrast, during the two weeks prior, the number of new sellers deciding to come to market was a more robust 6% above 2023’s level, highlighting a slight drop off in new seller activity as news of the surprise election announcement caused some hesitancy.
This dip is most prominent in the top-end sector, covering the largest five-bedroom-plus properties and four-bedroom detached houses. The number of new sellers choosing to come to market in the last two weeks in this sector is 3% lower than the same period a year ago, compared with being 11% higher than 2023 in the previous two weeks.
Housing has started to play a bigger role in the election campaign, with a flurry of manifesto pledges shared in recent days. It has been encouraging to see housing get more attention, however, many manifesto promises so far are continuations of existing schemes, revivals of old policies, or ideas which are only likely to help very specific parts of the market.
The timing of Bank of England rate cuts is likely to be of greater concern than manifesto housing promises to the majority of home-hunters. Mortgage rates remain stubbornly elevated, with the current average five-year fixed rate now at 5.04%. While this is improved from the peak of 6.11% in July 2023, it is still higher than the beginning of the year when it was 4.94%.
At the start of 2024, many will have been expecting, or at least hoping, to see some significant falls in mortgage rates by the halfway point of the year. If a Bank of England Base Rate cut can lead to lower mortgage rates, it will have a much wider and immediate impact on the market than the bespoke housing policies announced so far.
Tim Bannister concludes: “Some of the housing proposals announced are a good start with positive intentions, however, they could go further in supporting the majority of first-time buyers to get onto the ladder or helping people in different circumstances to move.
"Mortgage rates have been elevated for much longer than most expected, and a first cut to the Base Rate would be a big boost to mover confidence, as well as having a far-reaching impact on the market should it, as expected, lead to lower mortgage rates.
"Lower mortgage rates will have the most immediate impact on the market, however, we hope that well-thought-out housing policies will lead to sustainable market improvements over the long term.”
Tom Bill, head of UK residential research at Knight Frank, said: “Fading hopes of a summer rate cut combined with general election uncertainty means that demand is softer than normal at this time of year. Supply has held up better, which is putting further downward pressure on prices, which is something sellers need to bear in mind.
"Autumn may bring more political certainty and a rate cut, which should strengthen demand and means we expect UK prices to rise by 3% this year.”
Nathan Emerson, CEO of Propertymark comments: “It’s extremely positive to see stability within the housing market and despite a challenging period of high inflation and elevated interest rates, we are witnessing people approach the market with growing confidence.
"If conditions permit, we are hopeful to see the Bank of England start reducing the base rate when they next meet on Thursday. Should this happen, a potential raft of competitive mortgage deals over the coming weeks would be very welcome news for many people.”
Matt Thompson, head of sales at Chestertons, says: “We are now in the last days of the typically busy spring market and, compared to last month, are seeing a bounce in buyer activity. Particularly since the date for the General Election has been announced, house hunters who have been on the fence due to political uncertainty have become more confident about going ahead with their purchase. As a result, we expect June to conclude with a heightened level of buyer interest.”
Myles Moloney, area sales manager at Chase Buchanan, says: “June’s property market to date has remained positive and house hunters with larger equity and buying power have pushed on to agree a sale as they feel the result of the election is forgone. Buyers who are only just starting their property search, however, have been slightly more cautious to observe how the manifestos could benefit them during their property buying journey – particularly first-time buyers.”
