The macro backdrop for the housing market has evolved rapidly over the summer. Central Banks have increased interest rates to bring down inflation. Rising energy prices are adding to the cost-of-living squeeze. UK consumer confidence is low, however despite the challenging backdrop, these factors have not yet had a material impact on leading indicators of sales market activity.

The strong start to the year has carried the momentum into the summer. As we enter the Autumn selling season, demand for housing has started to soften a little and is lower than this time last year as the post-pandemic Stamp Duty holiday was reaching an end.  However, UK wide demand remains at 8% above the 5-year average.

The UK Government has responded with tax cuts and an energy price cap to support housing demand.

September 2022 saw a surprisingly resilient market, despite the economic pressures. The average price of a property coming to the market has risen by 0.7% (+£2,587) in the month or £367,760 – Yorkshire and Humberside have seen a modest increase of 0.3%, however this is plus 10% v last year.

The middle and high-end market sectors are driving price rises this month with a new record asking price in the ‘second-stepper’ category (three bedrooms and non-detached with four bedrooms). Buyer demand in these sectors is up by 2% even compared to the frenetic market of last year, while more choice is now also available when compared with 2021. These numbers suggest that for those who can, moving up the ladder to a home with more space remains a priority, even at a time when personal finances are stretched. This is excellent news for people living locally in Bramhope, Adel, Pool-in-Wharfedale and Cookridge.

First time buyers are facing cost pressures although the new stamp duty cuts may provide some additional support.

The stamp duty cut from Friday’s mini-budget means that two-thirds of homes (66%) are now exempt from stamp duty for first-time buyers in England, and a third of all homes are exempt for all buyers (33%). The stamp duty changes are welcome and will boost some sectors of the market but, overall, they are unlikely to offset the impact of higher mortgage rates on housing activity

Average monthly mortgage payments for new first-time buyers are currently £1,057, which is 40% of an average gross salary for the first time since November 2012. They will jump to £1,114 per month if lenders pass on the latest interest rise of 0.5%.

The Rightmove and Zoopla September House Price Index

Most new loans are at fixed rates and the cost to secure financing for these mortgages does not directly follow base rates

The number of homes coming back to the market has risen back to 2019 levels which gives buyers more choice.

The overall market remains surprisingly resilient despite the headwinds. Demand continues to ease slightly from the heady levels of last year as expected, but even with the fall in first-time buyer demand, the total demand is down by only 2% on the same period in 2021, and the stamp-duty costs could stimulate even more demand.

Compared with the pre-pandemic five- year average, total buyer demand is up by 20%. The number of homes coming to market has risen by 16% this month compared to this time last year, which is a return to 2019 levels

David Phillip commented “the end of the summer break and the start of the new school term is usually a time when we see renewed focus from buyers, as those with plans to move see an Autumn window of opportunity ahead of them. Price growth this month in the middle and high-end sectors highlights that even when finances are more stretched, many of the reasons for looking to move up the property ladder remain.

The numbers suggest that those who can afford to are still prioritising moving. However, home owners need to price competitively and shift their mindset, giving more consideration to local market dynamics, especially in the sectors where there is now more choice – there is a very fine line between a realistically priced home and a home that feels overpriced when many buyers are making every pound count”.

Early Autumn is a good time to market your home if you are considering a house move. The nights are still light enough to do evening viewings, many people want to be moved by Christmas and the New Year and the school's admission dates are at the end of January which is key for people looking to move into local schools.

For a free market appraisal call David Phillip FRICS (with over 30 years’ experience selling homes in North and West Yorkshire) on 01134 676 400

86, Leeds Road, Bramhope, Leeds, w. www.davidphillip.co.uk e:info@davidphillip.co.uk

Covering the areas of Bramhope, Pool-in-Wharfedale, Adel and Cookridge