The market feels like it’s stalling at the moment, maybe because of holidays, maybe because of interest rates and affordability or maybe because of confidence. It could be a combination of all factors.
The two issues which are currently restricting the market are a lack of first-time buyers and an over supply of property. Each first-time buyer that enters the market can generate an upward chain of three or four more sales illustrating first time buyers are the life blood of the whole market. As we speak to many of them on a day-to-day basis, they want lower interest rates to ease affordability issues and they also want more confidence in the economy to take that initial step.
Sellers have more competition than they’re had for many years with more and more properties now remaining unsold diluting chances of selling. According to Rightmove data, there are 13.1% more properties for sale in Northamptonshire today than there was a year ago. This needs to reduce drastically which will only happen by more new buyers entering the market. The number of price reductions locally are also up which again illustrates buyers won’t over pay.
Despite everything, properties are definitely selling and in fact Rightmove quote 5% more sales were agreed this June compared to last year. It’s the fact there are so many properties for sale that makes it feel slower.
The Bank of England meet again next week to discuss interest rates and a reduction is definitely needed to stimulate the market. A few good months of activity will soon reduce housing stock levels and eventually ease the market.
As always, we look forward with optimism and believe that the current market is a temporary summer blip.