With people taking the opportunity to holiday abroad, something that has been made difficult by the pandemic in recent summers, viewings were down 16% versus the five-year average in August.
However, there is still strong demand in the pipeline and the number of active buyers in the 12 months to August was unchanged from last year.
Meanwhile, offers accepted were up 33% last month versus the five-year average, meaning transaction volumes are set to remain high in the coming months. At the same time, supply continues to build from a low base as buyers look to capitalise on rising prices and act before mortgage rates rise further, which will keep downwards pressure on prices in coming months.
Due to the stamp duty holiday and renewed interest in country living since the pandemic, many buyers have either missed out or have found the cupboards relatively bare at times, choosing to hold off from listing their own homes as a consequence, which has, in turn, exacerbated the shortage of housing stock.
However, the amount of homes available for sale in the country market has been gradually increasing and at -25% in the 12 months to August vs the previous year, was the narrowest gap since October.
Charles Davenport, head of the Elmbridge region at Knight Frank said, “The last 24 hours have felt like a return to May or June regarding the number of new instructions we have launched. Buyers have kept in touch while away on holiday and there’s a huge appetite to buy, as many people have an eye on locking in a mortgage rate ahead of any further increases in the cost of borrowing.”
With Liz Truss now prime minister, the prognosis for the housing market will likely be dictated by the action taken to mitigate the cost of living and soaring energy prices. The announcement of a £100bn+ energy support package will likely boost buyer sentiment in the short term.
If unemployment remains low and inflation is contained, we expect house price growth in the housing market to continue to moderate in the coming months but avoid a cliff-edge moment.