Gloucester Property Market Update - June 2023
Posted on 17th June 2023 at 14:03
As always there has been plenty of written and spoken word regarding the property and mortgage markets and it is easy to jump on the bandwagon with a kneejerk reaction which in my experience is often misleading and inaccurate. It is for that reason that I have not written as much recently and have instead sat and watched the market before writing my latest blog. As always these are my personal thoughts although the figures and numbers are either available via Rightmove, Zoopla or my own research.
There is no doubt about that the property and mortgage markets have changed and changed significantly but I do not believe it is all doom and gloom and instead am of the opinion that we have merely returned to a more normal market with busy weeks and months and quieter weeks and months that we will need to adjust to having been spoilt by low interest rates over the past decade or so. Let’s take a look at the figures.
With base rates rising at every Bank of England meeting for the past 18 months the property market, whilst slowing from the heights of the pandemic has certainly proved to be resilient however the latest increase on 22nd June has certainly had a stalling effect. It remains to be seen whether this is longer term or similar to the chaos of October 2022 when lenders similarly withdrew a number of products only to replace them shortly after as a little stability returned and people again started to buy and sell. Inflation is coming down so it is likely that rates will stabilize and as competition amongst lenders remains the rates will once again ease slightly although we certainly need to accept that the days of ultra-low interest rates are long gone. If we look back historically anything between 4.5% and 5.5% would not be seen as unusual. What is certainly interesting is that daily visits to the Rightmove mortgage calculator are up 53%!
The squeeze on affordability is certainly having an effect on house prices with average asking prices in June down to £372,812. This is the first-time average asking prices have dropped in June since 2017 and it is likely that asking prices will continue to fall throughout 2023. The average asking price in the South-West was slightly higher than the UK average at £396,150 whilst in Gloucester it was £285,152. Interestingly houses are taking on average 44 days to sell in Gloucester compared to 54 days in the South-West and 56 days across the UK, a sign that lower valued areas are holding up slightly better than their higher priced compatriots. Gloucester remains in the top 5 of England’s largest 50 cities for speed of sale (time between a property going to the market and a sale being agreed) although it is certainly taking a lot longer than the rapid 18 days during the height of the pandemic.
There does appear to still be a demand from people to move with demand 6% higher than for the same period in 2019 (last normal market pre pandemic) although the challenging conditions have and will continue to result in a knock-on effect on sale prices. In addition, Zoopla report 18% more houses have been advertised for sale in the last 5 weeks compared to the 5-week average for the same period, which will furthermore put pressure on sellers to be realistic with their pricing. 42% of sellers are accepting offers greater than 5% below their asking price and therefore it is vitally important that when advertising your home for sale you are sensible and realistic and bear in mind that the property you will be buying will also be affected. Ultimately if the difference between what you hoped to sell for and what you hoped to buy for remains the same then it actually doesn’t matter too much about the sale and purchase price. In fact, if you are upsizing then the lower these figures the better as most of your associated costs will be lower too.
Finally, some figures taken from Rightmove covering postcodes GL1, GL2, GL3 and GL4 which would support the above -
In the week leading up to 21st June 82 sales were agreed compared to 76 for the same period in 2022 which further underlines the market resilience. The past week to 28th June, since the latest base rate increases, 66 sales were agreed compared to 93 for the same period last year.
Over the same one- and two-week periods there were 21 price reductions in each of the two weeks in 2022 yet this compares to 55 and 75 over the past two weeks.
As always I love to hear your thoughts and comments and am happy to answer any questions you may have so please feel free to message me, call 01452 260993 or email russell@rbwalters.co.uk. If you want to ensure you see all my future articles on the Gloucester property market and useful property related information then feel free to follow me or send a friend request.
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