Holidays and heatwave over... What can we expect from the autumn property market in PCL?
Kids are back to school, holidays over and we're back to our desks following the lovely late summer heatwave, ready for a new term! However, a slow summer and a continuing unpredictable market leaves everyone guessing, even in PCL.
This time of year is traditionally when we have an autumn flurry of activity and look into our crystal ball for the last quarter and into the new year, but really and truly, it's anyone's guess as to what the market is going to do.
How would we sum up 2023 so far? Well rather similar to the weather, it's been a weird and unpredictable year in the property market, at all levels. However unlike the weather, we did not see a late summer surge in the property market...and it's almost impossible to say what awaits us in the final quarter...
2023 has been slow and tricky for agents, despite a few very welcome, but short periods of positivity, with achieved prices falling slightly as expected, a reduction in new instructions due to an unwillingness to make the decision to sell, and a very significant fall in transactions as buyers wait to see if prices continue to come down...
We have been promised a plateau in interest rates, but we still don't know what will happen later in the year.
Rentals still buck the trend in terms of values, with rents continuing to increase due to the lack of stock (although this is slowly increasing), but it's impossible to really know the true state of affairs, as most rental properties are not even making it onto property lists before they're snapped up, which is where your property finding agent is worth his or her weight in gold.
Our advice in this market - remain focused and hold your nerve!
As ever, if you have to sell, you have to be realistic and ready. Over-priced properties are losing out as canny buyers are not prepared to hedge their bets on a falling market. If you turned down a good offer over the last few months, you may regret it.
If you are buying, don't be tempted to pay over the odds despite the lack of stock. However, for realistically priced properties there will be competition, so you need to be on your A game. Buyers and their agents will be using every trick in the book, with multiple contenders for each property that comes on the market and much like rentals, good properties may well not even make the lists. And of course, cash is definitely still king...
We've had some great results over the last few months but it's been hard work for sure and it doesn't look like it's going to get easier any time soon, so please give us a call for advice on selling, buying or if you're looking for that elusive rental property. We have eyes and spies everywhere!
Latest LonRes Report (August 2023) - Key Findings
Activity and values fell across the prime London sales market. There was further growth in rents in the prime lettings market, but activity remained low.
Achieved prices (sales market) were 2.6% lower than July last year, continuing the trend of limited significant movement in either direction since late 2021.
Sales transactions were 26.1% lower than the same month last year, and 9.1% lower than the 2017-2019 (pre-pandemic) July average.
Slow and Low - Sales market leading indicators also point to a slower market, reversing some of the positive signs from last month.
The number of properties under offer for the month was 30% lower than a year earlier and new instructions were down 12.4% on the same basis.
The £5m+ sales market continues to behave differently to the main prime London one, but there are signs that it too is slowing after a strong 2021 and 2022.
Sales in July fell compared to last year, by 24%, but activity remains significantly higher than pre-pandemic levels, by over 40%.
New instructions in this market continue to grow and fall throughs and price reductions are rising.
Annual rental growth in this month was 9.1%, the highest level in six months. This increase took rents to 28.4% above their 2017-19 (pre-pandemic) average.
LonRes data for June indicated an annual fall of 23.5% in lets agreed and a 5.3% fall in new instructions, with activity remaining at around half of pre-pandemic levels.
To note: Rental demand is so strong that a significant proportion of properties are being let without listing, and are therefore not captured in the data.
Source: LonRes