Posted on: Friday, December 9, 2022
Market recalibration
Price moderation and a sales slowdown are likely over the coming months but should be considered in the context of economic history, the frenzied post-pandemic market and the longer-term outlook.
The Autumn Statement provided a sobering assessment of the UK economy, but forecasts for the housing market are less dramatic than during 1989-1993 and the Global Financial Crisis in 2007. Inflation is expected to peak during the final quarter of 2022 before falling back over the course of 2023, and unemployment looks likely to remain lower than the 10-year average (5.3%)¹. The Global Financial Crisis, caused by banks lending more than borrowers could afford to pay, led to the more stringent mortgage lending criteria imposed since 2014. Today, only an estimated 4.2% of homeowners have less than 10% equity in their home².
Price correction
Property price growth is moderating and price correction is forecast. At 7.2% in the year to October, annual price growth remains considerably stronger than the 3.3% average between 2010 and 2019ᶟ. Since June 2020, average property prices have risen by close to £50,000, the equivalent of 24%, with lockdown and lifestyle changes spurring the market. Single-digit price correction is predicted for 2023/2024 before price growth is anticipated to return in 2025⁴. Buyers will continue to benefit from the 0% rate of stamp duty up to £250,000 until March 2025. With almost one in three movers ‘needs-based’⁵, such buyers will present sales opportunities.
2022 is set to be the busiest market since 2017, with the exception of 2021. Zoopla estimates there are around 293,000 sales currently in the pipeline to be completed before the end of the year. Sales volumes are predicted to be around 1 million in 2023, a level more on par with the pre-pandemic norm (Zoopla, JLL). October saw a 13% uptick in new supply to the market compared to a year ago, although stock levels remain low by historic standards (RICS).
Across Wales the time taken to sell a property has nudged upwards over the past month. However, at 43 days it remains considerably less than 64 days in October 2019 (Rightmove). Newport and Torfaen are currently the most active property markets in the region.
9%, 9%, 9%
Average property prices are expected to end the year 9% higher than where they started, but this growth is set to be countered by a 9% fall in property prices over the course of 2023/2024. House price growth of 9% is then expected over the course of 2025 to 2027¹. While such predictions will undoubtedly impact the market, almost one in three movers are ‘needs-based’, prompted by personal circumstances and job changes. These people will still need to buy and sell property.
The decade to 2021 saw the population of England and Wales grow by 3.5 million and the number of households by 1.4 million. In Wales the number of households and the population both increased by over 440,000. Early 2023 will see the release of new census information reflecting how the number of private dwellings across the region has changed.
¹Dataloft, ONS, Office for Budget Responsibility, 10-year average 2010-2019, ²JLL ᶟDataloft, Nationwide, ⁴Office for Budget Responsibility, ⁵Dataloft, Property Academy, survey of 10,000 home movers 2022
Properties for sale in Wales
Abergavenny, Wales, 4 bedrooms
This four-bedroom detached family home is perfectly placed in a hugely popular residential development in the Lower Common area of Gilwern. The Shires is particularly sought-after due to its attractive cul-de-sac configuration, its views of the Brecon Beacons and its great sense of community and therefore attracts buyers of all ages. This residence has two reception rooms and a large conservatory looking out over a pretty garden with a small water feature. The master bedroom has an en-suite shower room with three further bedrooms served by a family bathroom as well as a cloakroom to the ground floor. The kitchen is well equipped with integrated appliances and benefits from being open to a utility room. The integral garage is accessed via a driveway providing off-street parking.
Neath, Wales, 4 bedrooms
Crossways is a stunning four-bedroom property sitting in a plot of 0.5 acres, with private manicured lawns. The property features three bedrooms and a family bathroom to the first floor, an additional fourth bedroom to the ground floor, a bathroom and four reception rooms. The spacious property has views of its own private ground. There is a large country-style kitchen and utility room with a rear patio and a very large lounge with a wood-burning fire.
Chepstow, Wales, 5 bedrooms
Located on a quiet lane, this impressive stone-fronted property has been finished to a high specification throughout, offering five double bedrooms, three bathrooms, two large reception spaces, an oak-framed sun room and utility. The property has wonderful symmetry and is spaced over three storeys with the second floor acting entirely as the principal suite. An electric gated driveway provides wonderful privacy and parking for several vehicles alongside the double garage. Manicured lawns surround the property, with breath-taking countryside views beyond.
Contact us
Sell your property with your local expert this winter. Contact your local Guild Member today.
