With so many extraordinary factors influencing the prime residential property market, it is becoming difficult to price homes, and I don’t state that lightly as I have over 28 years’ experience selling houses! Many homes are still attracting competitive interest, but some are disappointing, with low levels of enquiries being attracted from the initial marketing. I suspect the reality is, for the first time in a while, the art of pricing is becoming the key to success. 6 months ago prices were being pushed by agents with every new instruction, and the market was moving at such a pace, over optimism was often rewarded. A finger in the air is no longer going to lead an agent to the right price.
The uncertainty surrounding the tragic Ukrainian situation, combined with the UK’s inflationary issues and inevitable interest rate rises, is effecting sentiment and in some cases affordability. However one looks at it, it seems likely that price growth will slow in Q3 and Q4 this year. Interestingly there were 104,470 residential transactions in July (ONS), the highest level since 2015, and the second highest level in 10 years, showing the existing strength of the market.
Hard evidence, combined with experience are the only basis on which I can advise clients. Dare I say it, there is always an element of luck involved in the sales process, and my job as a responsible agent is to negate this as much as possible. It is vital the marketing process is monitored and reviewed, and if a change of tack is necessary, the decision needs to be made early on.
Knight Frank forecast 5% growth in Yorkshire for 2022 with zero growth in 2023 and Savills expect to see 10% growth this year with a slight drop of -0.5% for 2023. We shall see. I am seeing three distinct markets at the moment: £400,000 to 700,000 is strong, £700,000 to 1.5 million is showing signs of slowing and £1.5 million upward is becoming more price sensitive. We saw an unprecedented amount of buyers arriving in Yorkshire from London and the south last year, and some eyewatering prices were achieved for the biggest and best homes. The reality is that many of these buyers have now brought so the competition has diminished and more typical market conditions resume.
The movement of buyers away from their place of work continues though, particularly at a local level, and whilst buyers will continue to arrive from across the country, I suspect we will see more localised relocation from northern, urban conurbations to more rural locations. The Office for National Statistics found that levels of homeworking have more than doubled over the pandemic with an additional 5 million homeworkers, taking the total to 9.7 million.
Hewetson and Johnson have sold houses at most price points this year from cottages between £300,000 to £600,000 to family homes for over £1 million. Most recently we have agreed sales on 2 houses with guides of £2.1 million and £2.5 million. With a degree of caution, I remain confident that there will be opportunities across our sector for both buyers and sellers. Due to the continued disparity between supply and demand, prices should hold for the time being.