There’s a growing supply-demand imbalance in the sales market according to the prominent industry asking price index, Home.
It says despite greater market optimism, spurred by improving inflation figures and therefore expectations of an interest rate cut, demand is outpaced as “vast amounts of properties continue to move through the current UK sales market.”
Home suggests that aside from three busy months last year, the current level of activity has not seen since the final quarter of 2018.
The mix-adjusted average asking price increased by 0.5% during the last month but prices remain essentially on a par with last summer overall and have yet to return to their 2022 high.
Notably, the northern regions are indicating significant higher price growth while poorer performing regions such as the East of England and the South West remain significantly down compared to this time 12 months ago.
Home is sharply critical of the Bank of England, describing its actions as “sloth-like” notwithstanding a likely delay in any interest rate move until after next month’s election.
It predicts that “prices will go sideways” until borrowing costs finally come down and boost demand.
Even so, orice cutting of properties currently on the market remains within the normal range; in fact, the total of reduced properties is very similar to that during summer 2019.
In terms of hard figures, asking prices have risen 0.5% since last month across England and Wales (the fifth consecutive monthly rise) and are up just 0.5% compared to June 2023.
The total unsold sales stock count for England and Wales increased again during the last month. Nearly 10,000 properties were added to agents’ portfolios, making the current count of 485,269 the highest June total since 2014.
Prices increased again in all English regions, Wales and Scotland during the last month. Vendors in the East of England were the least optimistic and upped their asking prices by the smallest margin (0.1%), while vendors in Yorkshire and the West Midlands were the most bullish, raising their prices by a full percentage point.
Despite the large volume of stock for sale, market momentum remains relatively healthy as shown by the Typical Time on Market for unsold property in England and Wales being seven days less than in June 2019.
The total number of new instructions entering the market during May 2024 was 14% more than during May 2023.
The North West remains the regional property market growth leader with a year-on-year gain of 3.8%, while the East of England is now the worst performing region with a loss of -1.5% over the same period.