July 2023 Market Commentary

The effects of the Bank of England interest rate rises are now showing, with the national average asking price dropping by 0.2% (- £905) from last month. This marginal drop in response to the rising mortgage costs and affordability constraints for buyers, shows that sellers are modifying their expectations.

Affordability is a consistent theme with the current market, with the average interest rate for a five-year fixed, 85% mortgage sitting at 5.69%. This is at a 0.49% increase from last month. However, rising interest rates haven’t impacted buyer demand, which remains resilient to the market changes, up 3% from this time in 2019.

The market we have seen over the last couple of months has been price sensitive, meaning that asking price was of strong importance during the initial marketing period. This advice is still very applicable during this changing market.

The local market in the South East was one of the most resilient to the turbulent economic changes earlier this year, and this national 0.2% drop in asking price we are now seeing is still attributed to the same issue – the stubbornness of inflation. In the earlier months of this year the South East average asking price remained high, but has now dropped by 1.1% from last month. This larger drop than the national average can be attributed to the stronger resilience of the local market earlier in the year, as rising interest rates didn’t impact asking price locally too much. However, now the rising interest rates have now impacted our local market through a reduction in both asking price and the number properties coming to the market.

Rightmove’s July house price index reflects on the experiences of agents around the country, showing a strong theme that correctly priced property is still seeing good levels of buyer interest, perhaps aided by the reduced number of properties available on the current market.

Overall, the market remains resilient with buyer interest levels up on the pre-Covid market of 2019. You may have heard on the news that we are currently in a ‘cooling’ market but the price changes we have seen are not too dramatic. With interest rates going up, it is important for asking prices to change accordingly to ensure the market keeps ticking over and responds well to the affordability issues facing current buyers.

If you’re thinking about selling, getting expert advice on marketing strategy and pricing is a must. We’re here to help with a team of experienced experts on hand, so give us a call to discuss your plans. Even if you’re just curious to find out how the current market changes have impacted the value of your property, we’re just a phone call away.

*Data sourced from publicly available resources including UK Government and Rightmove