OnTheMarket publish their Property Sentiment Index August 2022 (covering July data)

OnTheMarket publish their Property Sentiment Index for August 2022, detailing the difference between sentiment and reality, using data for July.

Stock at highest level in a year as seasonally-driven housing market returns

Key points from publication:

75% of active buyers in the UK were confident that they would purchase a property within the next 3 months
80% of sellers in the UK were confident that they would sell their property within the next 3 months
57% of properties were Sold Subject to Contract (SSTC) within 30 days of first being advertised for sale, compared with 56% in July 2021
No sign of political and economic uncertainty unsettling buyers or sellers
As a UK average, in July 2022 only 4% of movers were concerned (either very worried or slightly concerned) about securing a mortgage to fund the purchase of their next property, unchanged when compared to June 2022 (4%)
Greater London had the highest number of respondents who already had their mortgage Agreement In Principle in place prior to starting their search for a property (42%). The South West had the lowest number of respondents who already had a mortgage Agreement In Principle in place before starting their property search (27%)

We’re starting to see evidence of a return to a seasonally-driven housing market with a quieter summer following a busy spring, and the expectation of a pick-up in activity in the autumn once the children go back to school and buyers attempt to complete before Christmas. This is further indication of a more normalised market; a far cry from the frenzy which began in the early stages of the Covid pandemic where it was frantically busy all year round as buyers competed for limited stock. In July, the ‘new normal’, an elevated version of the pre-pandemic market, continued to grip the UK property market.

As we’ve noted for a while, stock levels continue to tick up. Since February, there has been a consistent week-on-week increase in stock levels with the highest level of available stock in July compared with any time during the previous 12 months. With seasonal effects coming into play this summer, there may be fewer active buyers as people are more inclined to take a holiday than has been the case over the past two years. With buyers potentially spending time away from their housing market searches, this may have the knock-on effect of stock levels continuing to improve.

Despite the rising cost of living, our data shows that sentiment was largely unchanged in July. Serious buyers remained committed, with 75% confident that they’d successfully purchase a property within the next three months, the same percentage as in June and May. Meanwhile, 80% of sellers were confident that they could complete a sale within the same time frame, falling only slightly from 81% in June and 82% in May. Interestingly, seller confidence in London fell by 9% in July when compared to June with 76% of sellers confident they’d sell their property within the next three months.

As there’s now more stock available on the market for buyers to choose from, sellers in this region may be less confident of their homes selling as quickly as they might’ve done previously. In addition, as activity could start to slow down in the coming months due to the re-emergence of more seasonal norms and people holidaying more during this period, a drop in seller confidence in London would be in line with the idea that more buyers may take time away from their property search as the market becomes more seasonally-driven.

With a slight uptick in the percentage of properties under offer, there is yet more evidence of the wave of positivity and optimism that continues to buoy the market. This is perhaps surprising given that when there is political uncertainty in the form of a leadership contest, it can convince people to put their property search or sale on hold while they await the outcome. However, it seems as though political events are not affecting confidence, with vendors continuing to put their homes on the market regardless.

Buyers may also be motivated by rising interest rates as the Bank of England attempts to bring inflation under control. They may feel they need to secure a mortgage and make their purchase now, while rates are still relatively manageable and before affordability is squeezed further. Despite rising rates, it is still a relatively cheap time to borrow money; in a few months’ time, the picture could be very different.

With sellers remaining confident despite summer holidays and political upheaval, and buyers keen to secure mortgage rates before they edge out of reach, all signs point to a housing market that is ticking along, albeit with the return of seasonal norms.

Kindly shared by OnTheMarket

Main article photo courtesy of Pixabay