Your local property news update

In a boost for the housing market, June’s figures show inflation slowed by more than expected to 7.9%. That’s down from 8.7% the previous month and a peak of 11.1% in 2022. The previous month’s figures had suggested that inflation (and the base rate) would remain elevated for a prolonged period. Now the money markets have to revise their expectations. As happened last month, the news has come too late to affect the various property indices, which only shows how buyers had been reacting to May’s more pessimistic data. Even so, the market proved remarkably resilient.

Rightmove’s most up-to-date index revealed a smallish month-on-month fall of 0.2%. Prices tend to be flat (+/- 0.0%) in June, so that is pretty close to the long-term average. More significant was the news that sales volumes were down by 12% compared to pre-pandemic 2019. On the other hand, buyer demand was up by 3%, and the supply of new property for sale was down by 12% over the same period, helping to support house prices.

Matthew Marchant, Rolstons Director of Property Sales, said: “Some movers are pausing until there is more certainty that mortgage rates have stabilised, as well as reviewing how higher costs affect their plans. However, there remains a large volume of motivated buyers who can factor rate rises into their budgets and are continuing to enquire about homes for sale, which is keeping the market functioning, albeit now with lower sales levels than at this time in 2019.”

Halifax’s index was also down in June (-0.1%), and, on an annual basis, prices dropped by 2.3%. In contrast, average house prices for this calendar year were up by +1.5%.

Paul Gillespie, Managing Director, Rolstons Group, said: “These latest figures suggest a degree of stability in the face of economic uncertainty, and the volume of mortgage applications held up well throughout June, particularly from first-time buyers. That said, the housing market remains sensitive to volatility in borrowing costs. Longer-term borrowing costs have risen to levels similar to those prevailing in the wake of the mini-Budget last year, but this has yet to have the same negative impact on sentiment. For example, the number of mortgage applications has not yet declined, and consumer confidence indicators have continued to improve.”

Looking ahead, if, as likely, the latest inflation data proves to be more than just a temporary blip, then confidence should begin returning to the housing market. However, it may be some time before mortgage rates start to fall, but it will give the market an even greater boost when they do.

If you’d like to talk to an agent for more personalised advice, our team are always on hand to help. We'd love to hear from you whether it’s just a quick chat or a no-obligation property valuation.

Warm wishes,

The team at Rolstons

FURTHER INFORMATION

Contact Paul Gillespie