Buyer demand levels declined in the fourth quarter of 2022 as economic pressures and the increased cost of borrowing continue to force many people to re-evaluate their home-buying aspirations, according to newly released data from GetAgent.
GetAgent’s Hotspots Demand Index monitors homebuyer demand across England on a quarterly basis. Current demand is based on the proportion of stock listed as already sold (sold subject to contract or under offer) as a percentage of all stock listed for sale. E.g, if 100 homes are listed and 50 are already sold, the demand score would be 50%.
The latest index shows that across England, buyer demand is currently at 48.3% which marks a -9.2% decline since Q3 2022 and -17.3% decline since this time last year, suggesting that the pandemic-inspired property boom is being brought well and truly back down to earth by the significant economic pressures facing the nation’s would-be homebuyers.
England’s strongest sales demand hotspot is currently Durham where it sits at 68%. This is -5.6% lower than Q3 of this year, but -14.6% lower than this time last year.
The city of Bristol, which ranked as the number one sales demand hotspot last quarter, now ranks second with 56.6% while Surrey (56.4%), Greater London (55.9%), and the City of London (54.8%) all maintain good levels of demand despite all experiencing quarterly and yearly declines.
In terms of annual change, the worst-hit places are the Isle of Wight (-25.5%), East Riding(-25.5%), and Derbyshire (-24.8%).
The worst-hit places in the last quarter are East Riding (-12.9%), Bedfordshire (-12.8%), and Staffordshire (-12.7%).
In the search for good news, optimism is hard to come by. No parts of England have experienced sales demand growth in the past year or the past quarter.
The smallest annual declines have been reported in Lincolnshire (-4.7%), Leicestershire (-8.0%), and Suffolk (-9.8%), while the smallest quarterly declines are in Suffolk (-3.6%), Durham (-5.6%), and Wiltshire (-5.9%).
Colby Short, Co-founder and CEO of GetAgent.co.uk, commented: “After a couple of years of manic demand, activity, and price increases, we end 2022 with a gentle bump back down to earth. Economic gravity was always destined to enforce the declines we’re currently seeing and, in many ways, it’s a surprise that it’s taken this long to happen.
“You’re going to read all sorts of pessimistic property headlines over the coming months, but the forecast isn’t actually that bleak. Look at the long-term history of house prices and you’ll see that the property market is never down for long, regardless of how many pandemics and economic crashes are thrown it’s way.
“However, the fortunes of the housing market are very much in the hands of the Bank of England at the moment because, until interest rates come down and borrowing becomes more affordable, lenders are going to be tighter with their mortgage offers and buyers are going to be nervous about taking on these relatively high levels of risk.”
Tenants struggling with the rising cost of living and surging energy prices are choosing to stay put rather than move to a new property and risking a rise in rental costs under a new contract, according to research from estate and lettings agent, Barrows and Forrester.
The firm has revealed that tenant demand has started to fall across England’s rental market, with demand down by as much as -29% in some parts of the country.
The Barrows and Forrester Rental Demand Index monitors rental listings across the nation, taking an average demand score for each English county based on the number of properties already let as a percentage of all rental listings, highlighting where demand for rental homes is at its highest.
Rental demand across England is currently sitting at 33.9% after a quarterly drop of -12% between Q3 and Q4 of last year.
With a decline of -28.9%, the City of Bristol has reported the most significant rental demand drop, followed by Nottinghamshire (-21.5%), the City of London (-20%), West Yorkshire (-18.7%), and Greater Manchester (-18.5%).
Some parts of England have, however, experienced demand growth in the past quarter, none more so than Durham where it has increased by 12%.
Demand on the Isle of Wight has increased by 3.5%, and it’s a 1.9% boost for both Shropshire and Essex. These are the only parts of the country to report an increase in rental demand.
England’s current rental demand hotspot is West Sussex where demand for rental properties sits at 56.1%. This is followed by Bedfordshire (54.4%), Essex (54%), Bath & North East Somerset (51.5%), and Dorset (51.5%).
Meanwhile, demand is at its lowest in the West Midlands (19%), Leicestershire (20.8%), and West Yorkshire (21.3%).
James Forrester, Managing Director of Barrows and Forrester, commented: “Rental demand is down across all but four areas of England and the rising cost of living and surging energy prices will be playing a significant part in this decline.
“Tenants are fully aware that landlords are seeing their own expenses rise, not least mortgage payments, and are passing these increasing costs to their tenants. As such, renters are choosing to stay put at the moment with tenancy agreements that were signed before the current economic crisis instead of exposing themselves to a market where prices are likely to get higher and higher.
“As the cost of living crisis eases, whenever that might be, rental demand will certainly increase. But for now, tenants are staying put.”
Article from Property Reporter