Hertfordshire housing market update

The Property Market Is Changing – But What Does It Really Mean for Sellers?

The latest UK housing data paints a seemingly contradictory picture. Asking prices are falling, buyer activity has softened and mortgage approvals have been under pressure – yet achieved house prices continue to show modest annual growth.

So, is the property market falling or remaining resilient?

The answer is a little more nuanced. The different indices measure different stages of the property journey and, taken together, they provide a useful picture of a market that remains active but has become increasingly competitive and price-sensitive.

For homeowners across Watford and the surrounding areas, understanding that distinction is particularly important as we approach the traditionally important autumn market.

Asking Prices Feel the Pressure

Rightmove's latest House Price Index reported that the average asking price of a property coming to market fell by 0.6% during June to £376,191.

A fall of this size in June is unusual. At this point in the year, asking prices would normally be expected to record modest growth.

One of the principal reasons is the amount of choice currently available to buyers. With more properties competing for attention, purchasers can afford to be more selective and sellers are having to work harder to stand out.

Zoopla's figures tell a similar story. Annual house price growth slowed to 1.4%, while sales agreed were running 7% below the same period last year.

Higher mortgage costs and wider economic uncertainty have undoubtedly influenced buyer confidence.

However, this does not mean buyers have disappeared from the market. Demand remains broadly in line with longer-term averages – buyers are simply more discerning about what they buy and, crucially, what they are prepared to pay.

Completed Prices Are Proving More Resilient

While asking-price and buyer-demand data has softened, the picture looks rather different when we consider actual selling prices.

Nationwide reported annual house price growth of 2.2% in June, up from 1.7% in May, although prices were unchanged month-on-month.

Lloyds also reported modest growth, with prices increasing 0.2% during June and annual growth standing at 0.6%.

These figures are not necessarily contradictory.

Rightmove measures the prices sellers are asking when properties first enter the market. Zoopla provides an earlier indication of buyer demand and agreed sales. Mortgage lender indices such as Nationwide and Lloyds are based further along the transaction process and can therefore reflect market conditions from several months earlier.

Taken together, they suggest that the market has slowed, but remains resilient.

A Buyer's Market – Particularly at the Top End

The more expensive end of the property market has inevitably been more sensitive to higher borrowing costs and economic uncertainty.

Prime market data indicates that values have come under greater pressure, particularly in London and the South East.

This is relevant to Watford and Hertfordshire because our market includes a significant number of larger family homes and premium properties where purchasers tend to have greater discretion over when and whether they move.

These buyers are still active, but they are taking their time, comparing properties carefully and expecting value.

For sellers, this makes the initial launch strategy particularly important.

A property that enters the market at an unrealistic price risks losing the crucial first few weeks of buyer attention. By contrast, a home that is positioned correctly and presented exceptionally well can still attract strong interest and, where competition is created, achieve an excellent result.

Mortgage Rates Could Provide Some Support

Affordability remains one of the biggest influences on the housing market.

Bank of England figures showed mortgage approvals had weakened, with 56,200 approvals in May, compared with an average of 63,200 over the previous six months.

More recently, however, increased competition between mortgage lenders has helped bring some headline fixed mortgage rates down.

That matters.

Even relatively small reductions in mortgage pricing can improve affordability and purchasing power, particularly for buyers moving further up the property ladder.

If borrowing costs continue to moderate, we would expect this to provide some support to buyer confidence and transaction levels.

There remains considerable economic and geopolitical uncertainty, so we would not expect a sudden return to rapidly rising house prices. But a more stable mortgage environment would be a welcome development as we move towards the autumn.

What Does This Mean for Sellers?

The message we are giving homeowners at Rolstons is relatively straightforward:

The market is active, but simply putting a property online and waiting for a buyer is no longer enough.

With buyers having more choice, three things have become increasingly important:

Price. Presentation. Proactivity.

The correct pricing strategy creates interest.

Exceptional photography and presentation make buyers want to view.

And proactive estate agency – speaking to buyers, following up enquiries, obtaining meaningful feedback and continually reviewing the marketing strategy – converts that interest into offers.

This is why we believe the first few weeks of marketing are so important.

Rather than launching before everything is ready, we would much rather spend the necessary time preparing the photography, property particulars and marketing campaign properly and then bring a property to market in the strongest possible position.

An Opportunity Ahead of the September Market

August can provide homeowners considering a move with a particularly useful window of opportunity.

Rather than waiting until September to begin thinking about selling, the next few weeks can be used to get market-ready.

Photography can be arranged while gardens and homes are still looking their best, marketing materials can be prepared and approved, and pricing can be carefully considered against the latest comparable evidence.

That means when the traditional September market arrives, the property is ready to launch rather than only beginning its preparation.

For the right property, presented and positioned correctly, we believe there will continue to be opportunities to achieve excellent results.

The Rental Market Remains Resilient

The rental market presents a somewhat different picture.

According to Zoopla's Q2 Rental Market Report, new lets averaged £1,287 per month, 2.1% higher than a year earlier.

Rental growth has slowed significantly from the exceptional levels seen following the pandemic, but supply remains constrained. Every region still has fewer rental properties available than in 2019.

Competition amongst tenants has also moderated, with an average of 5.6 enquiries per available property, well below the extraordinary peaks recorded in 2022 but still indicative of healthy demand.

London has seen rental demand increase, with average rents reaching £2,249 per month and annual rental growth of 2.2%.

Higher mortgage rates are also keeping some prospective first-time buyers in rented accommodation for longer, supporting tenant demand.

For landlords, this points towards a more normalised rental market rather than a weak one – with realistic pricing, presentation and professional management becoming increasingly important.

Our View

There is no question that the property market has become more challenging.

Economic uncertainty, mortgage costs and increased stock have given purchasers greater negotiating power. The premium market in particular remains price-sensitive.

But this is very different from saying that the market has stopped.

Good properties are still selling. Buyers are still moving. Mortgages are still being approved. And correctly priced homes are still achieving strong results.

What has changed is that the margin for error has become smaller.

For sellers, choosing the right asking price, presenting the property exceptionally well and appointing an agent prepared to proactively work the market can make a considerable difference to the eventual outcome.

At Rolstons, our advice is simple:

Don't just put your property on the market. Launch it properly.

If you are considering selling your home in Watford or the surrounding areas this autumn, now is an excellent time to start preparing. We would be delighted to provide an up-to-date market appraisal and discuss the strategy we believe would give your property the strongest possible start.

Rolstons Property Experts
Award-winning estate agency in Watford