The cost of living crisis and interest rate hikes have not yet dampened confidence in the housing market, as new research suggests buyers and sellers remain optimistic about finalising a deal.
Around 82 per cent of sellers were optimistic about completing a sale within three months in April 2022, the same level as in March, according to a survey of 120,000 customers by property website OnTheMarket.
Similarly, 76 per cent of buyers were confident they would purchase a property within the next quarter, a slight improvement from March.
House sales: Home buyers and sellers have remained confident about striking a deal
The overall figures mask differences across the country, however, with sellers in the East Midlands becoming more optimistic about selling their home, while those in London became less confident.
Some 82 per cent of home owners in the East Midlands were sure they would sell their house in the next three months, up from 75 per cent in March.
But sellers in London were a little less optimistic, with the same measure dropping to 82 per cent, from 86 per cent the previous month.
Alex Lyle, director of Antony Roberts estate agents in Richmond, London, said supply-demand imbalance has continued to push prices higher in the borough, but there might be signs of things slowing down.
‘The £1.5 million-plus freehold house market has been well received this year, with any sensibly priced family home attracting interest from a number of buyers, resulting in multiple bids and an agreed sale in excess of guide price. Below that threshold, it’s a more typical market.’
The historical pick-up in supply after Easter has yet to materialise
Alex Lyle, director of Antony Roberts estate agents in Richmond, London
And added: ‘The historical pick-up in supply after Easter has yet to materialise and this reduction in choice, plus increasing financial pressures, may see some buyers step back.’
Ian Marriott, head of Savills Nottingham, said more homes were making it onto the market, but they still had a number of buyers waiting in the wings.
‘Currently we have roughly 14 applicants per property, which is still considerably higher than normal so demand is strong,’ he said.
‘Some vendors previously felt that in such a strong market, they might run the risk of selling too quickly before finding somewhere to buy, but these concerns have now eased slightly and more are willing to come to the market.’
Homes were sold at the fastest pace in Scotland while the slowest region was Greater London
Homes were sold at the fastest pace in Scotland, OnTheMarket said, while the slowest region was Greater London.
Overall, the proportion of homes making it to the ‘sold subject to contract’ stage, which is when an offer has been accepted by the seller, within a month fell slightly in April compared to March.
‘Degree of caution’ starting to creep in
Scott Holley, senior associate at estate agents Galbraith in Edinburgh, said activity picked up in April compared to the start of the year, but noted a ‘degree of caution’ creeping into buyers’ decision-making.
‘They remain committed to buy, focused and motivated but are thinking about it harder than they might have done last year. Some of the negativity in the news is feeding through, not hitting confidence as they still want to move, but it’s dampening the level of offers.
The fundamental lack of stock at the present moment means that values will hold at a certain level
‘That said, we are still getting strong offers, the majority above asking price, as buyers are careful not to overstretch themselves but are balancing this with the knowledge that supply is severely constrained.’
OnTheMarket said the number of homes newly listed for sale was slowly increasing, but it expects prices to hold up for now as homes are still in short supply.
‘If there’s more choice of properties for sale and buyer numbers remain consistent, or even start to drop off, there could be a levelling off in activity and prices,’ said OnTheMarket chief executive, Jason Tebb.
‘However, the fundamental lack of stock at the present moment means that values will hold at a certain level.’
The report echoes the latest survey by the Royal Institution of Chartered Surveyors, which last week said there was ‘little evidence’ that the pace of house price growth was losing much momentum.
A limited supply of available properties and a steady growth in demand from buyers remain the overriding drivers of house prices, RICS said.
House prices have recently soared to a string of record highs, despite the tough economic conditions caused by the coronavirus pandemic as well as the cost-of-living crisis, with inflation expected to hit 10 per cent later this year.
Mortgage rates are also rising, with the average two-year fixed rate mortgage having breached 3 per cent for the first time in seven years.