Political Certainty Helps Market

The General Election has brought a new government and new certainty to the housing market. Both Rightmove and Zoopla are reporting confidence in the market, and with the Bank of England cutting interest rates at the start of August (the first drop since March 2020), autumn could be a busy time in the industry.

In Brief

Nationally the market has seen – 

• The average new seller asking price dropped by 0.4% (down £1,617) this month to £373,493, a bigger July drop than usual. Rightmove attributes this to sellers trying to cut through the distractions of the General Election, sporting events and holidays¹.
• The number of sales being agreed is 15% above the same period a year ago, when mortgage rates were approaching their peak¹.
• The number of new sellers is 3% above last year¹.
• Buyer demand remains stable overall, although there has been a 2% drop in demand in the first-time buyer sector¹.
• The supply of homes for sale continues to grow and is 16% higher than a year ago, according to Zoopla².
• UK house prices are on track to be up to 2% higher over 2024².
• With 4%+ mortgage rates, the market has adjusted with increased activity rather than faster price growth².
• House prices have generally been flat over the last 12 months, however prices over the first half of 2024 are higher across the UK².

In terms of the Welsh property market –

• The average house price in Wales is now £265,679, down 0.1% over the last month, and up 1.9% year on year¹.
• The average number of days for a Welsh property to be on the market before a sale is agreed remains at 71¹.

¹Source – Rightmove

²Source – Zoopla

Overview

The end of the General Election campaign and the certainty that this has brought to the market bodes well for autumn, according to Rightmove. They report that the market remained steady through the build up to the General Election and that while the average price of property coming to the market has dropped by 0.4% (a bigger drop than the 20-year July average of -0.2%), this was due to sellers trying to catch the attention of buyers amid the summer holidays and sporting events.

With the new Government in place and the Chancellor’s quick announcements on house building targets and planning reform, Rightmove believes the certainty of this will aid home mover confidence. In particular, it highlights the importance of more support for first-time buyers who have struggled with the high mortgage rates. Delivering sustainable housing policies will help the market in the medium and longer term it says.

Zoopla says that the housing market is the most balanced it has been in five years. It says that while it continues to adjust to 4%+ mortgage rates, there are positive signs of increased activity. More sellers are listing homes for sale, more sales are being agreed and buyers are paying a greater proportion of the asking price as confidence returns.

Zoopla also adds that house prices are slowly increasing across all regions over the first half of 2024 – but we would add a word of caution to this, as outlined in our regional overview below. Zoopla believes that market activity will continue to improve, but says pricing will be kept in check by more supply and affordability constraints. It says that the housing market needs a 12-24 month window where incomes rise faster than house prices to help reset affordability. According to the OBR (Office for Budget Responsibility) incomes are predicted to rise 4.5% in 2024, with Zoopla expecting incomes to rise faster than house prices in 2025.

One thing that has happened since the July reports came out is that the Bank of England announced an interest rate drop on 1 August 2024. This took rates down from 5.25% to 5%. This is encouraging news and while we believe it needs to drop further, it is a positive sign to help boost the market into the autumn.

In summary, with more sellers listing, more sales agreed and the recent Bank of England announcement on interest rates, as well as the predicted income rise, the two main property reports are cautiously positive about what the autumn holds.

Regional Insight from Cardigan Bay Properties

We are committed to helping every client – buyers and sellers – in their property decisions. As part of this, every month we bring you the latest industry insights and comments on the property market and how it is developing. As part of this we look at reports from the influential websites Rightmove and Zoopla to gain an accurate overview of the national property market, but we also carefully monitor our local market to ensure you have information about our key regions of Ceredigion, Carmarthenshire and Pembrokeshire. 

The completion of the General Election has undoubtedly brought more stability to the market and increased confidence among buyers and sellers. However, while the media is reporting price increases across the country – including our regions – we believe much of this is prices of properties coming onto the market – not sold prices. We are seeing that buyers are being more cautious about making an offer, and when they do it is generally below the asking price.  

Part of this is due to the fact that many buyers are also waiting to sell, and need a firm offer before they can proceed. We’re having a lot of viewings, but unfortunately, there is a caution in the market that we hope will be lifted as interest rates come down.

We believe that buyers are viewing a wide range of properties and making a short list so that as soon as they have a buyer for their own property they can quickly act on their preferred purchase property. As a result, we’re encouraging all of our owners to take viewings from all those who request them, not just those able to proceed. As soon as interest rates drop further, prospective buyers will act quickly for their preferred property. 

The Bank of England cut in interest rates on 1 August was a step in the right direction, but in our opinion, it needs to come down to around 4.something% to really get the market moving again.

Key for buyers is that there are so many properties coming onto the market at the moment. In terms of new property instructions, we’ve had nearly a 100% increase in July 2024 over July 2023, while viewings are up 28% for the same periods.

However, even before the General Election and the interest rate cut, figures from the Land Registry show that there was positivity in the market – you can read more about this in the overviews from the official UK House Price Index below, although these only cover the period up to the end of May 2024. 

Your Regional Insights

Here we give you an overview of the latest House Price Index results for our key regions – Ceredigion, Pembrokeshire and Carmarthenshire. Please note, that each month these figures are two to three months behind due to the Land Registry taking longer to register new sales, so this report includes sales up to the end of May 2024.

To help you follow the trends for these regions, the graphs below show figures from July 2019 (pre-Covid pandemic) to May 2024.

CEREDIGION

May 2024 saw a strong increase in the average property price in Ceredigion – it is now £249,825, up from £239,100 at the end of April 2024. This is an exceptional increase that is reflected across the different property types. Detached houses now average £316,861 (up from £302,298 in April); semi-detached average £211,656 (up from £202,857); terraced houses £184,756 (up from £177,507); and flats £120,874 (up from £116,370). 

This growth is also reflected in the yearly percentage change for properties in Ceredigion, which has seen strong increases across the board – but particularly for detached properties which went from an increase of 1.9% in April 2024 to an increase of 4.8% in May 2024. Overall there was a 5.8% increase, up from a 3.4% increase in April. For other property types, semi-detached properties increased to 7.3% (up from 5% in April); terraced properties increased to 6.8% (up from 5%)  and flats increased to 4.2% (up from 3.3%). 

The average monthly change for the region was up 4.5%, up from 1.4% in April – with detached properties experiencing the largest monthly change, up 4.8% following a 0.9% increase in April – demonstrating a surge in confidence in the region.

View the full Ceredigion report.

PEMBROKESHIRE

The increase in confidence in the West Wales housing market continues in Pembrokeshire. In this popular region the average house price is up to £240,200 in May 2024, from £233,783 in April 2024. All property types are benefiting from this growth, with the average price of detached homes reaching £330,714 in May – up from £320,614 in April; for semi-detached properties the average price in May was £214,437 (up from £208,968 in April); for terraced properties it was £180,655 (up from £176,589); and for flats the average price reached £121,215 in May (up from £118,118 in April).

This growth is reflected in the yearly percentage change for the region, with prices up 7.7% overall year on year. While all property types have seen this growth, semi-detached houses are showing an increase of 9.3% year on year in May. Detached properties are up 6.8%; terraced houses are up 8%; and flats are up 5.6%. 

In addition, the monthly percentage change saw an increase of 2.7% for May 2024 – this follows a 4.4% monthly increase in April, with detached houses showing the biggest increase this month – their prices are up by 3.2%.

View the full Pembrokeshire report.

CARMARTHENSHIRE

The positive mood continues, on the whole, in Carmarthenshire, which had seen a drop in the average property price in April 2024. This month, the average property price in May 2024 has increased across the board, reaching £202,199 – up from £196,598 in April.

All property types have enjoyed this surge, with detached properties now at an average price of £270,841; semi-detached properties reaching £179,488; terraced properties at £146,535 and flats at £119,036.

However, in terms of the yearly percentage change Carmarthenshire property prices have dropped by 0.8% year on year in May. Flats saw the biggest fall – down 2.9%.

When we compare the monthly price changes however, May 2024 reported an increase of 2.8% across all property types – that compares to a drop of 1.5% in April 2024. This monthly increase in prices was seen across all properties, following all falling last month.

View the full Carmarthenshire report.

CURRENT UK HOUSE PRICE INDEX

* As of May 2024, the average house price in the UK is £285,201, and the index stands at 149.6. Property prices have risen by 1.2% compared to the previous month, and risen by 2.2% compared to the previous year.

*Details provided by the Land Registry. For more information on the House Price Index please CLICK HERE

Please note that the stats provided by the UK House Price Index are live and constantly evolving.