Will House Sales Pick Up?
The UK housing market has slowed over the past year, leaving many sellers questioning when activity and transaction volumes might start to pick up again. Between rising inflation, increasing mortgage rates, and general economic uncertainty, buyers have become more cautious and hesitant about making large purchases like homes. However, there are some indications that sales could gradually improve in the coming months as certain economic factors stabilise.
Current Market Conditions
It is undeniable that the UK property market has cooled considerably since 2021. According to industry data, house prices are still increasing slightly but the pace has slowed significantly, while the volume of property sales taking place monthly has dropped noticeably.
For sellers, this means homes are taking longer to sell, some have to reduce prices to attract buyers, and there is less frenzied bidding between interested parties for the most in-demand properties. Overall, buyers hold more power now compared to sellers.
This market slowdown has been driven by the cost of living crisis, rising mortgage rates and general affordability issues facing buyers. Even though demand still exists, buyers are more wary about overpaying or over-stretching their budget in the current climate. Transactions take longer to complete as buyers take time to confirm their finances.
However, one positive is that buyer demand does remain relatively resilient, even if translates into fewer sales. Many analysts feel that sales activity is likely to pick up gradually over 2023 as economic headwinds ease.
Factors That Could Reinvigorate the Market
While the market remains challenging presently, some factors could see sales pick up again:
Stable Mortgage Rates
One key factor will be mortgage rates coming down or stabilising if the Bank of England stops raising the base interest rate. This could bring back buyers who had delayed purchases due to affordability issues or uncompetitive mortgage rates. If rates level out, buyers will have more confidence to progress transactions.
Persistently high inflation has been a major factor suppressing the housing market. However, if inflation starts to ease back down towards the Bank of England’s 2% target later in 2023, this could spark buyer activity again. More stability around prices will bring reassurance.
Release of Pent-up Demand
Once affordability and economic factors improve, there is likely to be some pent-up buyer demand released back into the market. Surveys consistently show many people still have plans to buy but are currently delaying them. As conditions stabilise, this demand should filter through, driving increased activity.
Limited Supply of Homes For Sale
One structural factor supporting the market is that supply remains constrained – there are simply not enough homes for sale to meet demand. This imbalance will help put a floor under house prices and should sustain buyer interest. Competitive dynamics around scarce stock may gradually return.
In short, while the market remains subdued for now, analysts feel that much of the buyer demand is not gone, but merely suppressed temporarily until inflation, costs and interest rates stabilise at lower levels.
Advice For Sellers in the Current Market
For those trying to sell their home in today’s conditions, patience and adaptability will be key. Rather than waiting for the market to pick up, there are steps sellers can take to maintain buyer interest:
- Price homes competitively and sensibly for the current market. Buyers are very cost-conscious right now, so overpricing will deter interest.
- Consider offers very seriously, even if they fall slightly short of the asking price. Buyers expect discounts in this market.
- Make the home as appealing as possible through renovations, styling and de-cluttering. Presentation matters more than ever.
- Highlight any energy-efficient features or cost-saving measures when marketing the property. This attracts energy-conscious buyers.
- Be as flexible as possible around timeframes for sales progress. Keep buyers updated if rival offers come in, as gazumping risk puts people off.
- Maintain good communication with your estate agent to adapt pricing or marketing if needed to generate more buyer leads.
Conclusion – The Current Market Calls for Patience
In conclusion, while the housing market has undoubtedly slowed and sales volumes are down, the factors suppressing buyer appetite are expected to gradually ease over 2023 if inflation stabilises and interest rates stop rising. This could slowly coax more buyers back into the market.
However, sellers will need to be patient, price competitively, and focus on boosting their home’s appeal in the meantime. Those who can adapt to the current conditions will be well-positioned to benefit when sales start to pick up again. Maintaining close contact with agents to adjust pricing or strategy as the market evolves will also be key.
For now, the market favours neither property buyers nor sellers too strongly. But with inflation projected to fall back next year, buyer demand is likely to return, slowly at first, but then with increasing momentum. Sellers who can ride out the storm will eventually find buyers for their properties.