Your Watford & Hertfordshire market report

October's housing data has been much anticipated as it's the first to reveal how the market is reacting to stabilising the base rate. The good news is that all the major indices are showing improvement - Nationwide's index was up by 0.9% in October, Halifax's by 1.1% and Rightmove's by 0.5%. On an annual basis, house prices have been falling for some time, but the figures show that the process is now slowing. Halifax's yearly fall eased from -4.5% to -3.2%, and Nationwide's went from -5.3% to -3.3%. Rightmove's bucked the trend, falling slightly from -0.4% to -0.8%.

Despite the more positive data, there is no doubt that the market has slowed considerably, with sales and activity levels dropping across the board. Nationwide reports that mortgage approvals were down by as much as 30% compared to the same period in pre-pandemic 2019. At the same time, prices are being supported by a severe shortage of stock.

It has resulted in what Rightmove describes as one of the most price-sensitive markets in years. So, if you want to sell your home, it is vital you put it on at the right price. Rightmove's analysis shows that putting it on at too high a price and then reducing it will seriously damage your chances of a sale. Their data shows that correctly priced properties are finding a buyer in less than half the time that it takes those that have to make a reduction. And, when they do find a buyer, the sale is 50% less likely to fall through. In addition, if a property receives its first buyer enquiry on the first day of marketing rather than after two weeks, it has a 60% better chance of finding a buyer.

Matthew Marchant Rolstons' Sales Director says that many sellers appear to be struggling to come to terms with the current conditions and that they: "Need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market, where six in ten homes are now selling rather than eight in ten.” He adds, “Buyers are likely to be looking for homes that they feel represent excellent value and to attract one of these motivated buyers, sellers need to price right the first time."

As the base rate is not expected to be significantly reduced for some time, the market will likely remain subdued. However, solid income growth and modestly lower house prices and mortgage rates will gradually improve the outlook and affordability levels.

Rental & Buy-To-Let Market

At £1,278pcm, the average UK rent (outside London) has again risen to record levels. It is the 15th consecutive quarterly rise, a record and an increase of 10.1% over the previous 12 months. In London, more records were broken, with rents up 12.1% to a high of £2,627.

Rightmove’s figures make clear what's behind all the rises – the huge disparity between supply and demand. Since pre-pandemic 2019, demand has risen by 41%, whereas supply has fallen by 35%. The chronic shortages in supply have also meant that the average number of enquiries per property has shot up by more than 300%, from 8 to 25. Fortunately, there are now signs of improvement. Even so, for tenants, the market remains highly competitive. Rolstons' Lettings Manager Breydon Duffy says:

“Record rents and far more tenants looking to move than there are homes available mean it will still feel tough for many currently navigating the market. However, there are signs that some of the pressure between supply and demand is beginning to ease, with the number of new rental properties coming to the market now at its highest level since the end of last year." He notes, though, that there is some way to go before this filters through to rental prices, but if the balance between supply and demand continues to improve, the pace of rent rises could start to slow more significantly.

The King’s Speech: The Conservatives have renewed their commitment to getting the Renters’ Reform Bill through parliament. However, the end of No-Fault Evictions (Section 21 Notices) is being held up by rebel MPs who first want to improve the court process. The government is also planning on introducing a bill to make it easier and cheaper for leaseholders to buy a share of the freehold and making changes to prevent freeholders from charging excessive ground rents.

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 just a quick chat or a no-obligation property valuation.

Warm wishes,

The team at Rolstons

FURTHER INFORMATION

Contact Paul Gillespie