After last month's better than expected figures, the markets watched closely to see whether inflation is finally on the retreat. The latest data has now been released, and it seems last month was no one-off, as headline inflation has dropped once again, down from 7.9% to 6.8%.
","Slug":"your-local-property-news-update-1","Date":"2023-08-28","news_category":{"Title":"SALES","Slug":"sales-and-lettings"},"Image":{"alternativeText":"","url":"https://ggfx-rolstons.s3.eu-west-2.amazonaws.com/i.prod/shutterstock_217102201_31f74ad6c9.jpg","url_sharp":{"childImageSharp":{"gatsbyImageData":{"layout":"constrained","backgroundColor":"#78a8d8","images":{"fallback":{"src":"/static/331c50eb8c181c549630e1b92123c614/e9fbf/shutterstock_217102201_31f74ad6c9.jpg","srcSet":"/static/331c50eb8c181c549630e1b92123c614/47073/shutterstock_217102201_31f74ad6c9.jpg 210w,\n/static/331c50eb8c181c549630e1b92123c614/92751/shutterstock_217102201_31f74ad6c9.jpg 420w,\n/static/331c50eb8c181c549630e1b92123c614/e9fbf/shutterstock_217102201_31f74ad6c9.jpg 840w,\n/static/331c50eb8c181c549630e1b92123c614/92058/shutterstock_217102201_31f74ad6c9.jpg 1680w","sizes":"(min-width: 840px) 840px, 100vw"},"sources":[{"srcSet":"/static/331c50eb8c181c549630e1b92123c614/5dc88/shutterstock_217102201_31f74ad6c9.webp 210w,\n/static/331c50eb8c181c549630e1b92123c614/239c3/shutterstock_217102201_31f74ad6c9.webp 420w,\n/static/331c50eb8c181c549630e1b92123c614/61848/shutterstock_217102201_31f74ad6c9.webp 840w,\n/static/331c50eb8c181c549630e1b92123c614/831ed/shutterstock_217102201_31f74ad6c9.webp 1680w","type":"image/webp","sizes":"(min-width: 840px) 840px, 100vw"}]},"width":840,"height":480}}}},"Author":{"Image":{"alternativeText":"Rolstons-Paul Gillespie","url":"https://ggfx-rolstons.s3.eu-west-2.amazonaws.com/i.prod/Paul_Gillespie_2x_5c5e5db142.jpg","url_sharp":{"childImageSharp":{"gatsbyImageData":{"layout":"constrained","backgroundColor":"#083878","images":{"fallback":{"src":"/static/6ddf4ee79416270a24fb9ddd87fc0457/d4a57/Paul_Gillespie_2x_5c5e5db142.jpg","srcSet":"/static/6ddf4ee79416270a24fb9ddd87fc0457/40657/Paul_Gillespie_2x_5c5e5db142.jpg 16w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/77b35/Paul_Gillespie_2x_5c5e5db142.jpg 32w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/d4a57/Paul_Gillespie_2x_5c5e5db142.jpg 64w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/19e71/Paul_Gillespie_2x_5c5e5db142.jpg 128w","sizes":"(min-width: 64px) 64px, 100vw"},"sources":[{"srcSet":"/static/6ddf4ee79416270a24fb9ddd87fc0457/e789a/Paul_Gillespie_2x_5c5e5db142.webp 16w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/ef6ff/Paul_Gillespie_2x_5c5e5db142.webp 32w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/8257c/Paul_Gillespie_2x_5c5e5db142.webp 64w,\n/static/6ddf4ee79416270a24fb9ddd87fc0457/6766a/Paul_Gillespie_2x_5c5e5db142.webp 128w","type":"image/webp","sizes":"(min-width: 64px) 64px, 100vw"}]},"width":64,"height":64}}}},"JobTitle":"Managing Director","Name":"Paul Gillespie","Position":1},"Content":[{"id":"64fe0acf202d8ad7a4959375","moduleType":"NormalText","moduleData":{"Text":"After last month’s better-than-expected figures, the markets have watched closely to see whether inflation is finally on the retreat. The latest data has now been released, and it seems last month was no one-off, as headline inflation has dropped once again, down from 7.9% to 6.8%. If the trend continues next month, it could mark a turning point for the UK’s economy. That would be excellent news for the housing market as continually rising mortgage costs and the uncertainty over how high they might go has steadily chipped away at both prices and buyer confidence. There are still likely to be one or two more rises to come but the base rate should peak earlier and some way below the 6.5% that had been forecast.
\nDespite it all, house prices are continuing to prove remarkably resilient. Halifax, Nationwide and Rightmove all report falls in July but only between 0.2% and 0.3% in what is usually a flat month in summer.
\nAs Matthew Marchant, Director of Sales, Rolstons, says:
\n“In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February. The pace of annual decline also slowed to -2.4% in July versus -2.6% in June. These figures add to the sense of a housing market which continues to display resilience in the face of tough economic headwinds.”
\nAccording to the leading indices, sales volumes are the area most affected by the rising base rate. Nationwide reports in June that they were 10% below pre-pandemic levels (2019), and the most up-to-date figures, Rightmove’s, show sales volumes were down by 12% in July. At the same time, there was a shortage in the supply of new properties coming up for sale, whose numbers were also down by 12%, which helped support prices.
\nThe top two tiers of the housing market – second-stepper and the top-of-the-ladder homes - saw the biggest falls in sales volumes - down 14% on 2019 levels. Surprisingly, first-time buyer (FTB) sales are holding up the best, with many searching for smaller homes to offset their higher borrowing costs. As a result, sales volumes in the FTB sector had the smallest falls at 9%.
\nIt may be a while before the new, more positive inflationary data has any discernible effect on sales and prices, especially as more hesitant buyers will want to see inflation falling for a third month before making a move. After that, how the market responds will depend on how quickly and how far mortgage rates fall. Most commentators, however, are not expecting mortgages to come down significantly over the next 18 months, so house prices are unlikely to go shooting up again. Still, they should stabilise, with sales volumes returning to normal levels.
\nIf 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.
\nWarm wishes,
\nThe team at Rolstons
\n\n
FURTHER INFORMATION
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