As more homes are coming up for sale across the UK, we find that buyers are given more choice when looking as they are staying on the market longer than previously due to the higher interest rates and the cost of living effecting affordability.
Good news for buyers, there’s more choice available when it comes to finding a new home.
The average estate agent office now has 23 homes for sale, the highest levels seen since January 2021.
We’re still not quite back up to pre-pandemic levels yet, when the average agent had 29 homes on their books.
But the growth in homes available for sale is being seen across all areas of the UK.
Greater availability of homes for sale reduces upward pressure on prices
Rebuilding sales inventory, which boosts buyer choice, is part of the move to a more balanced housing market.
However, it’s important that sellers price their homes in line with what buyers are prepared to pay, given the current hit to buying power caused by higher mortgage rates.
More homes for sale will help to reduce the scale of the upward pressure on house prices and bring us back to a more normalised housing market for buyers.
House prices are not expected to crash in 2023
Expectations are that we won’t get an over-supply of homes for sale in 2023.
We expect some element of scarcity to remain a feature of the market, meaning house prices are not expected to fall dramatically next year.
The drivers and motivations to move home have shifted, and will likely continue to do so.
Pandemic-related forces, including greater labour market flexibility, the rise in the number of people reaching retirement age and the desire for more space, means people will continue to look for new homes next year.
Some of these factors though, are now being compounded by rising living costs.
In particular, high levels of rental inflation are adding to the cost of living pressures for renters. Where we see rental demand very strong in comparison to the available rental properties which is driving rentals up.
We expect this to support first-time buyer demand in 2023, even with the oncoming headwinds and the hit to buying power from higher mortgage rates.
