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June 2023 Market Report. Local property news for you...

As always, let's read past the headlines and discuss what's really happening in today's still-busy Bristol property market. 

Let's start with a word from a trusted source Rightmove, which reports on real-time market activity.

Average new seller asking prices fall by £82 (-0.0%) this month to £372,812. This is the first monthly drop in new asking prices this year and the first at this time of year since 2017. On average over the previous ten years, we have seen an increase of 0.6% in asking prices at this time of year, indicating that buyer affordability constraints and more pricing realism from new sellers have brought forward the usual summer slowdown. There have been some significant increases in fixed mortgage interest rates over the last few weeks following stubbornly high inflation figures, piling pressure onto already very stretched budgets. These increases in rates and monthly mortgage payments may mean that some have to pause their plans for now. However, Rightmove’s latest snapshot of the market suggests the immediate impact on activity has been limited with most movers determined to carry on if they can still afford it. Tim Bannister Rightmove’s Director of Property Science

Over the last two weeks, Rightmove’s statistics show no effect on demand but a modest impact on sales activity as movers navigate the latest mortgage rate rises. The number of buyers enquiring to agents about properties for sale is still 6% higher than in the same two weeks in the more normal market of 2019, while the number of sales agreed during this period is 6% lower, a slight drop from agreed sales figures being 3% behind 2019’s levels in May. However, it remains to be seen whether the expected further increase in interest rates will impact these figures further.

Economy

The UK economy grew by 0.2% in April according to the latest official figures released by the Office for National Statistics. UK wages rose by 7.2% in the three months to April, their fastest rate (excluding the pandemic) in 20 years, however, the rate of growth is still lower than the rate of inflation (8.7%). The Bank of England has warned sharp pay rises are likely to prolong high rates of inflation. The base rate of interest has risen to 4.5%, its highest rate in 14 years, with a further rise expected on 22nd June. The latest forecasts are that the rate will peak around 5.5%.

Prices

Nationwide report the average price of a property rose 0.5% month-on-month in April, the first month-on-month rise after seven consecutive months of falls. Rightmove reports year-on-year asking prices are 1.5% higher. Expectations for future house price growth have improved in recent months. At £285,009 the average price of a property is 4.1% higher in March than a year ago. Month-on-month the ONS UKHPI indicates the average price fell by 1.2%.

Over the last 12 months, the average sales price in Bristol was £372,088. 33% of sales in the past 12 months were flats, achieving an average sales price of £280,232. Houses achieved an average price of £428,058. The highest value recorded by the Land Registry over the past 12 months was £1,800,000 for a flat and £3,500,000 for a house.

Transactions

The HMRC report 82,120 sales took place in April 2023, a fall of 7.9% in March. New instructions were reported to have risen by a net balance of +14% of survey participants in the latest RICS Residential Market Survey, breaking a run of thirteen successive monthly readings beforehand.

The number of mortgage approvals has increased 14.9% in April compared to the previous quarter, however, lending is down 18.6% on the same period (Bank of England).

Demand

Over 52,000 mortgages were approved in March, up 18% from February according to the latest data from the Bank of England. This represents the most significant month-on-month rise since early 2009 (excluding the summer of 2020).

70% of buyers canvassed in April were confident they would purchase a property within the next three months, and just 7% stated they were concerned about securing a mortgage to fund the purchase (OnTheMarket).

Investment/lettings

Annual growth in private rental prices in the UK rose to 4.8% in the year to April. This is the most significant annual percentage change since the UK series began in January 2016. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets. 

Development & new build

Just over 255,000 new homes were built in the year to the end of Q1 2023. This represents a 20% drop quarter on quarter, however, year-on-year completions rose 2.5% (MHCLG). 

Sources: Rightmove, Zoopla, On the Market, Dataloft, Land Registry, National House Price Index, DLUHC

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