Using temperature to express a percentage, the latest market insight from Propcast reveals where demand has risen or fallen the most by looking at the percentage of properties for sale that are under offer or subject to contract in September 2022, then measuring buyer demand by Region, County and City before finally comparing the results with the previous quarter.
According to the findings, all Regions outside of London saw a fall in demand, with East Midlands leading the way as its market heat temperature dropped from 65° to 57° (12.3%). Whilst London saw a rise of 11.6%, heating up from 43° to 48°. However, all Regions are still in a sellers’ market due to their temperatures being over 34°.
Despite all counties being in a hot sellers' market, for the first time since this report began in Q1 2022, buyer demand has fallen everywhere over the last quarter, with West Glamorgan and Clwyd seeing the biggest drop at -15.4%. These are followed by Cornwall, South Glamorgan and Lincolnshire.
In terms of cities, the data is slightly more optimistic with buyer demand rising in three locations over the last quarter. Chelmsford tops the leaderboard with a 21.2% quarterly increase from 20° to 59°, moving from a buyers’ market to a very hot sellers’ market, followed by Canterbury and Winchester.
All UK cities are still in a sellers’ market, but buyer demand has dropped for 93% of them. Cambridge saw the biggest fall, dropping from 70° to 49° (30%), followed by St Asaph, Wells and Newport.
When analysing postcode districts, buyer demand rose by 9%. M15 in Manchester experienced the largest increase at +48%. Whilst M15 and L5 (Liverpool) have now moved into a sellers’ market as their market heat temperatures rose over 34°. Meanwhile SA33, HU18 and IG4 now have temperatures over 50°, which means they have migrated from a hot sellers’ market to very hot.
Meanwhile, buyer demand has fallen for 88% of postcode districts, with PO39 (Isle of Wight) seeing the largest fall from 78° to 36°, placing it just two degrees from a buyers’ market.
To see how your local market is performing, click here
Gavin Brazg, Founder of PropCast and TheAdvisory, said: “We kick start Autumn reporting a substantial difference in buyer demand over the last three months, seeing many falls. This is undoubtedly due to rising energy bills, interest rates and mortgages, which have had a huge impact on the UK's property market.
When the 'mini budget' announced stamp duty would be cut permanently for particular price thresholds, it offered a glimmer of hope to help boost the market, especially for first-time buyers. However, with mortgage lenders removing deals soon after and rates passing 6% for the first time since 2008, a certain amount of panic has started to kick in.
“I don’t believe we’re in for a cataclysmic crash given robust employment numbers and the huge proportion of homeowners already on fixed-rate mortgages, however, but the UK property market is in for a rough ride over the next couple of years as many first time buyers (who are the beating heartbeat of the UK property market) simply won’t be able to afford as much house for their money due to now significantly higher mortgage payments. This means first-time buyer housing stock will have to come down in price and this will have a knock-on effect throughout the rest of the property market.
“Although a lot of the UK is still in a sellers' market, we are seeing big drops in demand, pushing those locations further towards a buyers' market. More properties are also coming to market. This re-balance means the balance of power is slowly shifting towards buyers, which will mean house prices will stabilise and potentially even fall. This means it's more important than ever before for sellers to remain realistic about what their home is worth, and choose a good local estate agent who will implement an optimal pricing and marketing strategy. Otherwise, they will find their home will struggle to sell.
“For buyers, this means they may be able to negotiate on price a bit more - something that hasn't really been possible over the last two and half years. This can help ease the burden of increased mortgage repayments, as can any stamp duty saving. However, demand is still out there, so buyers need to make sure they are ready to move when they're making their offer. This means having the funds organised, solicitors appointed and all the paperwork in place.”
