What impact will growing economic headwinds have on the Spring market?

There is no doubt that 2022 has started with a flourish in the market and Spring is traditionally a time when activity increases, however, with the recent interest rise and growing pressure on consumer’s back pockets, will we continue to see the high levels of demand and surge in property prices that have been the theme of the market for the past while.  We spoke to some Members of The Guild of Property Professionals about what they foresee happening to property prices in Spring and beyond. 

Looking at property prices, Jim Stillwell, Branch Director at Keats Estate Agents in Haslemere, says: “We expect property prices to remain high in Haslemere due to the severe lack of stock and high demand from buyers searching for a home in the area. The supply of properties coming to market is low and properties that are marketed with us are selling quickly, however the Spring market is likely to bring more activity. We predict that competition amongst buyers will remain high throughout the year. Many are often prepared to pay in excess of the asking price to secure their ideal property.” 

Sales Director at Barbers Estate Agents in Shropshire, Matthew Arthan, agrees saying: “Whilst there is still a general shortage of stock, my view is that property prices will continue to rise until either stock numbers increase to more normal levels or macro-economic factors worsen considerably more.”

According to Dan Henry from Bensons, stock constraints are still an issue in Northern Ireland. “Demand continues to outstrip the supply of property, and typically highly sought-after properties attract strong enquiries resulting in guide prices being exceeded. New builds continue to show strong growth with new releases typically being over-subscribed and booked within hours of being released. Traditionally the spring represents the most popular time to list your property for sale and it is anticipated the level of supply within the marketplace will increase. Despite the Global challenges we remain confident that the local property market continues to recover post Covid, and high levels of confidence continue to prevail within the marketplace.”

Richard Stovold, Owner of Seymours Guildford and Burpham offices adds: “Our view is while there is a strong interest from buyers to secure homes close to highly regarded schools with outstanding countryside pursuits on their doorstep, prices will continue to rise.  Perhaps not at the pace of 2021, which was fuelled by the stamp duty holiday, but a more realistic upward trend.  It is all about supply and demand which at the current time is in favour of a seller, with multiple buyers chasing each property place on the market.”

Head of Sales at Whites Estate Agents in Salisbury, Tony Williams says that he believes that the market will continue to be strong this year but suspects that next year the brakes will come on. “At the moment buyers so outweigh sellers that I cannot see any reason, even with rising general costs, Ukraine, and rising interest rates, that we will slow down. Currently we are listing correctly priced properties, which will sell within a week with multiple viewers and mostly multiple offers. We never list anything now without the term ‘guide price’. Fundamentally we have way too many people living in the UK for too few properties. We have buyers pouring out of the cities to ‘buy twice the house at half the price’ who can work from home and the older generation who are moving to be near children, all of whom bring good money with them and don’t haggle over the asking prices. Property prices will therefore continue to rise this year and I suspect by around another 10%.”

Alex Walton, Sales Manager at Bradford and Howley, believes that prices will continue to increase but not at the rate of knots of 2021. “There is still an imbalance of buyers to sellers at the moment. Stock is coming on and it’s selling very fast, so I think that stock levels will stay the same,” he adds.

James Millard of James Millard Estate Agents in Kent, expects to see very little fluctuation in headline marketing figures with any effect absorbed by way of the subsequent reduction of asking price, should a property remain unsold. Speaking about stock levels, he adds: “Based on the expected scale of interest rate increase, I would not expect stock levels to rise. However, and more importantly, if we see an end to the war in Ukraine, a continued economic recovery after Covid and renewed impetus in strengthening the UK economic position globally, post Brexit, people will gain confidence and there would be a whole new surge in activity.”

Branch Manager at Norman F Brown in Bedale, Simon Davies, says that in his area they still have a market that has low supply and high demand. “Stock levels are not increasing at present, and we can't see what will change that in the short to medium term. However, we anticipate demand will drop as the year goes on due to high inflation leading to more interest rate rises, causing mortgages to become more expensive as the year goes on. This may lead to some buyers being priced out of buying and demand will then drop which will impact on the rate of house price growth. With this in mind, if buyers are seriously in the market they should buy sooner, if possible, rather than later, to take advantage of lower interest rates making their mortgages cheaper and more affordable.” 

Melfyn Williams of Williams & Goodwin and All Wales Auction believes that 2022 could be the year of stability and return to normality in the housing market. “With rising inflation having to be controlled and in turn, expected interest rate rises, we expect a cooling of rapid house price growth in the medium term, which will be good for the housing market.  Most ‘booms’ and significant house price growth last about 18 months - any longer periods of sustained rapid growth usually end in misery; therefore, a cooling now is to be expected and notwithstanding outside issues affecting the market - should provide a return to normality rather than a crash.”

While most agents experiencing constrained levels of stock, some are seeing an increased number of listings coming market. According to Richard Harrison, Director of Bentons in Leicestershire, his office has seen an increase of around 20% month-on-month so far this year.  

Director of C residential in Staffordshire, Angi Cooney, says: “We know that our stock levels are increasing with more people coming onto the market. This cannot be said for all agents in our area.”

Residential Sales Manager of Millbank Estate Agents, Donna Vincent, says that she is seeing stock levels slowly increasing since the beginning of the year, although they are still at an all-time low.

Roger Wilkinson of Wilkinson Grant & Co in Exeter says: “As the green shoots of Spring begin to show through and Covid begins to loosen its grip, stock levels are already on the increase as a new wave of home movers enter the market. Judging by the vast numbers of market appraisals we have carried out in recent months; we predict a return to a ‘more normal’ market in quarter two and with it a slowdown in house price growth.”