The sales market is in the midst of one of its more subdued periods of the year and that is very much reflected in the current crop of statistics. Perhaps of more significance are the reports of rising supply levels and flat demand.
The Halifax notes new buyer enquiries have been static or falling for 18 consecutive months and the number of agreed sales were down in May and June. New instructions, in contrast, had been falling for 26 consecutive months, but over the past two months, they have been edging up again.
Rightmove Director, Miles Shipside, says:
“While an increase in seller numbers is a welcome sign of more liquidity in a generally stock-starved market, it has unfortunately come at a quieter time of year. Prospective buyers will need tempting with a summer special price or a beautifully finished and presented must-have home, and sellers whose homes tick these boxes then need an estate agent with good marketing skills to promote it effectively.”
The changing balance between supply and demand means that prices are softening and Rightmove reports a third of properties currently on the market have been reduced at least once since they were first listed – the highest level at this time of year since 2011.
August’s quarter point rise in the base rate is, on the other hand, not thought likely to have much impact on house prices. The rise had been expected for some time and with over 90% of new mortgages on fixed rates and around 35% of all existing ones on variable rates (source: Nationwide), many borrowers will not see any difference in their payments for some time to come.
At the same time, the high levels of competition between lenders means new mortgage prices are unlikely to rise significantly. Of more concern is whether fear of further base rate rises may damage buyer confidence.
Although, in mitigation, the Bank of England has recently predicted rates are unlikely to rise above 3% for several decades.