What is currently happening in the UK property market?
A Deep Dive into the Latest Property Market Trends with Toby Phillips
In this week’s insightful discussion, we welcome Toby Phillips, the driving force behind Martin & Co., Whitegates, and the Experience franchised estate and letting agency brands. As the property market navigates through a whirlwind of changes, Toby offers a comprehensive look into the latest headlines and trends shaping the UK real estate landscape.
A surge in new listings
The property market has witnessed a notable uptick in new listings this week, with 38,562 new properties hitting the market. This figure marks a substantial rise from the 29,200 listings observed the previous week, a period impacted by the bank holiday. The 2024 year-to-date (YTD) listings are 7.4% higher than the historical averages from 2017, 2018, and 2019, and a significant 13.4% above the same week in 2023. With a weekly average of 35,193 listings for 2024, this trend indicates a robust flow of new properties, reflecting a dynamic market atmosphere.
Sales Figures on the Up
Gross sales have shown a promising increase, with 25,900 homes sold subject to contract this week. This figure represents a 24.8% rise compared to the same week in 2023 and surpasses the 2017/18/19 YTD levels by 7%. Even more impressive is the 12.8% increase over the 2023 YTD levels. Net sales, calculated by subtracting the sale fall-throughs from gross sales, stood at 18,300 this week, marking a 29% increase compared to the same week last year and a 15.4% rise YTD over 2023.
The Battle of Home Exchanges
Out of the 1,019,576 homes that have left UK estate agents' books since January 1, 2024, 53.11% have successfully exchanged and completed. This leaves 46.89% unsold or withdrawn from the market, highlighting the challenging conditions faced by many sellers. The discrepancy between expected and actual sales suggests that overvaluation remains a significant issue, impacting the likelihood of a successful sale.
House Prices and Market Dynamics
August saw a slight dip in the average sale agreed price per square foot, falling from £341 in July to £338. This represents a 1.22% decrease over the past four months. The current asking prices also reflect this trend, with the average asking price of new listings this week standing at £482,692—significantly higher than the weekly average of £438,607 for 2024. The price reduction trend is noteworthy, with 25,878 properties seeing price cuts. Yet, with higher stock levels, only 1 in 6.6 properties is being reduced, indicating a potential mismatch between market expectations and actual pricing.
Sale fall-through rates
Sale fall-throughs, a measure of transactions that collapse before completion, surged to 27.5% this week—a typical post-bank holiday increase. This rate is higher than the 7-year long-term average of 24.2% and notably lower than the peak of over 40% following the Truss Budget in Autumn 2022. The percentage of fall-throughs in the month as a proportion of the total sales pipeline decreased from 5.66% in July to 5.39% in August, suggesting a slight improvement despite the higher fall-through rates in absolute terms.
The Current State of the Market
The average asking price of properties sold subject to contract remains steady within the £350,000 to £370,000 range, closing at £355,244 this week. This stability contrasts with the broader market trend of slightly drifting house prices. Accumulative gross sales year-to-date have reached 888,565, surpassing the 2017/18/19 average of 830,352 and showing a significant increase over 2023.
The residential sales stock on the market stood at 710,000 at the end of August, down from 715,000 in July but up from previous years. This is reflective of a higher inventory compared to past years, including 2021 and 2022. The sold subject to contract pipeline was at 504,000 units by the end of August, showing an increase from 2023 and 2022 figures.
Local Focus: IPswitch
This week’s local focus highlights Ipswich, a key area demonstrating the broader trends observed in the UK property market. While specific details about Ipswich’s market dynamics weren’t provided, it serves as a representative case for understanding regional variations within the national context.
As Toby Phillips and I wrap up this week’s analysis, the property market reveals a mixed bag of rising listings, steady sales, and fluctuating prices. With ongoing adjustments and market responses, the landscape remains fluid, offering both challenges and opportunities for stakeholders across the board. Stay tuned for more updates as we continue to track these evolving trends and their impact on the real estate sector.
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