The UK property market report for the week ending Sunday, 10th December 2023, paints a robust picture of the UK housing market.
In a notable development, the sales agreed price per square foot (sqft) in November 2023 has witnessed an increase to £331.19, marking a slight rise from October’s £329.63 sqft. This uptick is a positive indicator of market resilience and buyer confidence. It also has a strong coloration to what will happen to the Land Registry stats in the Spring of 2024.
Additionally, the year-to-date (YTD) listings for 2023 are holding steady at 99.2% of the average seen in the years 2017, 2018, and 2019. This consistency underscores a stable market supply, maintaining near-average levels despite varying economic conditions. The level of listings is really important, because if they’re too high that will drag prices down and if they’re too low that will push prices up. What we almost have is a Goldilocks level of listings.
Gross house sales for YTD 2023 are at 94.4% of the average of the 2017,2018 and 2019 levels, which indicates healthy transaction volumes.
More importantly, Net sales (Gross sales less sale fall throughs), which will eventually represent actual exchanged transactions, stand at 90.4% of the YTD average of 2017, 2018, and 2019. While slightly lower, this figure still represents a decent market performance considering all the bad news and doom monger in the press.
There are two flies in the ointment.
The first fly is the number of properties for sale. UK properties for sale on the 1st of December 2023 stood at 634,000 compared to 524,000 on the 1st December 2022, and 397,000 on the 1st of December 2021.
This near doubling of the properties on the market in two years should be a reminder to all British homeowners (and estate agents who overvalue) that they have a lot more competition and therefore realistic pricing is vital if they wish to sell their property in 2024. (The average number properties for sale on the 1st of December of 2017/18/19 was 613k and 1.36 million in 2008 (the year of the property crash when we had an massive excess of supply of properties for sale)).
The second fly is the drop in saleability. In 2022, estate agents were paid 65.53% of properties they listed (i.e. they exchanged and completed). However, in 2023, estate agents have only been paid on 52.39% of properties they listed. This proportional drop of 20.1% means estate agents have to work a lot harder to get paid on the same they did last year.
Interestingly, there are some big regional differences with largest drop being seen in East Anglia, dropping 26.1% with Northern Ireland at the other end of the scale at 5.7%. The average drop in Inner London is 17%, yet in Outer London 23.6%.
Overall, the data suggests that even as we enter the third week of December, the UK property market is faring quite well, especially when compared to the same period in 2022. The market is only marginally trailing behind the averages of the years 2017, 2018, and 2019, indicating a resilient and thriving property environment. This resilience is a promising sign for investors and homeowners alike, signalling continued stability and potential growth in the UK property market.....