Ashtons Summer Housing Market Review 2023

Commentary

The first half of 2023 for the property market both nationally and locally has not been without significant challenges fundamentally caused by the changing interest rate environment, persistent high inflation and the legacy of the disastrous Truss/Kwarteng budget of last Autumn.

From a national perspective house prices have settled in many areas and started to come down. The latest 0.5% rise in the base rate will undoubtedly compound this. In May, the Halifax Price Index reported the first year on year house price fall in 14 years. The Halifax Report goes on to detail prices in May were broadly in line with prices in April of this year.

Whilst it is hard to get a clear picture from a national perspective, at Ashtons we have a deeper understanding of the market in Hertfordshire and the surrounding areas.

The dynamic of property supply versus buyer demand has changed considerably in the last 12 months. New buyer registration across the Group is 32% down on the equivalent period of 2022. However, the supply of new homes coming into the market over the same period has stayed broadly the same at 102% against the equivalent period of the last year. This has undoubtedly led to a more cautious market but there are some reasons for optimism. The rebalance of supply and demand has led to a far greater choice for local movers looking to move within the area, allowing more time to select the ideal home without facing competition from unencumbered out of area purchasers. It is somewhat inevitable due to the shock the housing system received at the end of last year that a period of adjustment was to be expected. In May as a group, Ashtons agreed sales of 40% of our clients who have marketed with us. June looks to be following the same pattern with buyers returning to the market with consistent levels of agreed sales despite the onerous interest rates. This has been generated by strong collaboration between the teams in the offices and with our clients working in concert to facilitate a move despite the headwinds we have been facing.

Market Outlook

Indicators point to further increases to the base rate which continues to affect mortgage products available in the market. Inflation is not yet falling at the rate expected to reach the Prime Minister’s stated goal of 5% by the end of 2023. The summer period will be pivotal, the first key test will be inflation figures for June which will be announced later in July.

Despite all the uncertainty, activity still remains in the market throughout Hertfordshire. Significant opportunities exist for our local clients who entrust our colleagues to navigate them through the current climate.

For an expert perspective and focused advice on how best to leverage your most valuable asset during the second half of the year, contact our team today to arrange a detailed appraisal for your future financial and lifestyle planning.