Our Managing Director, Michael Edwards, was recently invited by The Surrey Law Society to write an article and he chose to comment on the current state of the UK property market.
The UK Property Market – Is it doom and gloom?
Unless you have been living under a rock for the last few years, it won’t have escaped your attention that the UK property market has been in state of boom to say the least and now, according to the media, it teeters on the edge of a catastrophic freefall bringing prices crashing to the floor accompanied by a property fire sale. Well, like most headlines, there is a story behind that which provides some context that allows us to get the full picture.
On a national level, if we take the same period in 2023 and compare it to the same period in 2019, (which is the last resemblance of a normal property market!) the number of new properties coming to the market has decreased, but only by 3.8%.
So, sellers are clearly still coming to the market, but the number of properties selling is often seen as a better indicator of how the property market is performing. Again, taking the same period in 2023 and compare it to 2019, the accumulative net sales in 2023 are at 92.3% of 2019 levels. This hardly paints a picture of doom and gloom that the media so artfully creates for us.
Of course, another key factor, and perhaps more importantly, is what is happening to property prices. Are property prices falling? Are properties still selling consistently over the asking price? Will there be a price crash?
As a serial Rightmove stalker myself, I have noticed a lot more properties locally to me recently are showing as “Reduced”. This is being seen across the market as a whole and currently reductions in asking prices are at the highest level they have been since 2019. So, does this mean that prices are falling?
Well not quite. This just means that people who are looking to sell and have been on the market for a while are now having to react to a cooling market and be more realistic about the price they will achieve for their home, or in some cases remove their property from the market and stay put.
But what about the prices of new properties coming to the market? Well, again taking the same period in 2019, so far in 2023 the average asking price is £91,032 higher and indeed, the story is similar taking into account the average selling price which is £65,969 higher in 2023 compared to 2019.
So, the story so far is that lots of properties are coming to market, asking prices are still high, selling prices are also still up, but reductions in asking prices are higher also. Place this in a glass, add a dash of interest rates up and downs, stir well and you are left with the UK Property Market: A State of Flux.
This is of course a slightly tongue in cheek view of the UK property market, but as many property professionals might well tell you, there is no doubt that the market is cooling down, but in fairness it needed to and all the data points at the market returning to 2019 activity levels.
The main issue facing anyone selling a property right now is getting the valuation correct. Get it too high and you won’t sell, get it too low and you sell under the market value. Given the context of this publication, for anyone handling property currently, getting the valuation correct requires expert handling and of course the stakes involved of getting the valuation too high or too low, specifically for tax purposes, are significantly higher than the property sitting on the market for too long. That would bring a different type of doom and gloom to your door.
This is why at Southey & Co, as Chartered Surveyors, we specialise in providing Red Book property valuations to make sure that we get the correct valuation and, most importantly mitigate the risk for you and your clients.
Going even further, with our concierge service and our expert knowledge of all things property, we can make your life easier with all things property related including insurance, maintenance, chattels, IHT funding and property sales.
One call and it’s off your desk and onto ours, to a single point of contact all designed to make your life easier.
If you want to have a look at the publication in full, it can be found on the link below