‘Less urgency in housing market’ as buyers show caution over near-term moves
Sentiment about moving in the longer term remains positive, according to a survey from Savills.
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Your support makes all the difference.House-hunters are feeling more hesitant about moving in the next few months, research has found.
A survey of prospective home-buyers carried out at the end of August found that an overall net balance of 1.7% feel less, rather than more committed to moving in the next three months.
Back in April, a net balance of 18% of house-hunters had felt more, rather than less committed to move in the three months that followed.
The research was carried out for property firm Savills, which said sentiment about moving in the longer term remains positive.
A net balance of 7.1% of those surveyed in August feel more committed to moving in the next year and a balance of 15% feel more committed to moving in the next two years.
Mortgage rates have been rising following a string of Bank of England base rate rises, and Office for National Statistics (ONS) figures released on Wednesday showed the average UK house price was £39,000 higher in July than a year earlier.
Savills also said those planning to upsize to a bigger property appeared particularly cautious about moving in the next six months, with discretionary purchasers such as people looking to buy a second home or an investment property also being particularly likely to be feeling more hesitant.
On the other hand, downsizers and people looking to relocate felt more committed overall to moving in the next six months.
More than half (54%) of the 1,000 prospective buyers surveyed cited a lack of properties to choose from as an issue, which was down from nearly two-thirds (63%) of those surveyed in April.
The issue of stock levels appears most pronounced at the top end of the market, with nearly nine in 10 (88%) house-hunters looking to purchase a property above £1 million hindered by a lack of suitable properties.
Recent interest rates rises and the increased cost of living have started to affect buyer budgets in some areas of the market.
Nearly a third (29%) of prospective buyers surveyed said they have reduced their budgets in response to these factors.
This is particularly true for those who are expecting to extend their borrowing – including half (50%) of those wanting to take the first step on to the property ladder and 44% of those who are looking to upsize.
Despite transactions remaining robust over the summer months, there’s now certainly less urgency in the market
Frances McDonald, research analyst at Savills, said: “Despite transactions remaining robust over the summer months, there’s now certainly less urgency in the market, with rising costs of debt impinging on the budgets of those most reliant on a mortgage.
“Increased costs of living are also making buyers much more conscious when it comes to how much they are willing to spend.”
She continued: “Ultimately, in the short term, the market will be predominantly driven by homeowner need, rather than lifestyle influences which drove the market during the pandemic, especially now that lockdowns are fading into distant memory.
“As a result, after more than two years of runaway house price growth, sellers will need to become much more realistic when it comes to pricing their home, especially as more stock comes on to the market.”