Property demand has dropped while price reductions have increased in recent weeks, data shows.
Two separate pieces of industry data give new insight into the health of the property market and how agents could be affected by the current climate.
It comes as Chancellor Kwasi Kwarteng yesterday reversed plans to cut the 45p tax rate to 40p. The policy was part of Kwarteng’s mini-Budget last month, that sparked market concern and saw the value of the pound plummet and gilt prices rise, before Bank of England intervention, while mortgage pricing has increased.
This appears to have already fed into buyer demand and agency listings.
The latest Homebuyer Hotspots Demand Index by estate agent comparison site, GetAgent.co.uk, has revealed that buyer demand levels were on the decline in the third quarter of 2022.
The index monitors homebuyer demand across England on a quarterly basis using Rightmove data.
Current demand is based on the proportion of stock listed as sold subject to contract or under offer as a percentage of all sales listings.
The latest index shows that across England, buyer demand is currently at 57% which marks a 5% decline since the second quarter and a 7% annual decline.
England’s strongest sales demand hotspot is currently the City of Bristol where it sits at 74%.
This is still 5% lower than the second quarter of this year, but 7% higher than the same period of 2021.
The worst hit places annually are Cornwall, Herefordshire and Lincolnshire, down 19%, 15% and 14% respectively.
Only three regions of England are reporting positive annual demand growth.
These are Bristol, the City of London and Greater London (1%).
As for quarterly changes, the only place to report positive growth is the City of London, up 1%, while all other regions have seen demand drop.
The largest of these drops were found in Worcestershire, Cornwall, Northamptonshire, Leicestershire, and Bedfordshire, all of which are reporting demand declines of 8%.
| Table shows homebuyer demand in England for Q3 2022, alongside the quarterly and annual % change, sorted by highest current demand | |||||
| Location | Q3 2022 Demand % | Q change | Annual change | ||
| City of Bristol | 74% | -5% | 7% | ||
| Hampshire | 65% | -4% | -7% | ||
| Northamptonshire | 64% | -8% | -11% | ||
| Bath and North East Somerset | 64% | -6% | -5% | ||
| Gloucestershire | 64% | -6% | -8% | ||
| Wiltshire | 64% | -6% | -10% | ||
| West Sussex | 64% | -5% | -9% | ||
| Suffolk | 63% | -5% | -11% | ||
| South Yorkshire | 63% | -5% | -8% | ||
| Somerset | 62% | -6% | -11% | ||
| Dorset | 62% | -7% | -12% | ||
| Essex | 61% | -6% | -10% | ||
| Cheshire | 61% | -7% | -8% | ||
| Bedfordshire | 61% | -8% | -9% | ||
| Warwickshire | 61% | -5% | -5% | ||
| Worcestershire | 61% | -8% | -11% | ||
| Tyne and Wear | 61% | -4% | -2% | ||
| Norfolk | 61% | -6% | -12% | ||
| West Midlands (county) | 61% | -6% | -5% | ||
| West Yorkshire | 60% | -6% | -8% | ||
| Nottinghamshire | 60% | -7% | -8% | ||
| Cambridgeshire | 60% | -5% | -8% | ||
| Staffordshire | 60% | -5% | -10% | ||
| Rutland | 60% | -5% | -11% | ||
| Derbyshire | 60% | -6% | -9% | ||
| Berkshire | 60% | -3% | -2% | ||
| East Sussex | 60% | -6% | -11% | ||
| Greater Manchester | 60% | -6% | -7% | ||
| Surrey | 59% | -4% | -4% | ||
| Buckinghamshire | 59% | -6% | -6% | ||
| Devon | 59% | -7% | -13% | ||
| Hertfordshire | 59% | -6% | -6% | ||
| North Yorkshire | 58% | -7% | -9% | ||
| Shropshire | 57% | -6% | -8% | ||
| Kent | 57% | -7% | -9% | ||
| Northumberland | 57% | -4% | -6% | ||
| Leicestershire | 56% | -8% | -9% | ||
| Durham | 56% | -5% | -5% | ||
| East Riding of Yorkshire | 55% | -6% | -9% | ||
| Merseyside | 55% | -6% | -8% | ||
| Oxfordshire | 55% | -4% | -3% | ||
| Cumbria | 55% | -4% | -8% | ||
| Lancashire | 54% | -6% | -9% | ||
| Isle of Wight | 54% | -7% | -14% | ||
| Herefordshire | 54% | -6% | -15% | ||
| Cornwall | 53% | -8% | -19% | ||
| Lincolnshire | 51% | -7% | -14% | ||
| Greater London | 45% | -3% | 1% | ||
| City of London | 26% | 1% | 4% | ||
| England | 57% | -5% | -7% | ||
Colby Short, chief executive of GetAgent, said: “The property market has been awash with buyer activity for some time now, with low rates of interest and various other incentives, such as the stamp duty holiday, ensuring that demand for homes has been unwavering.
“However, our latest index suggests that these red hot market conditions have started to cool under the significant weight of economic difficulty coupled with a very real cost of living crisis.
We’re yet to see what effect Liz Truss’s new wave of Stamp Duty tax breaks is going to have on the market. There is a chance the measures will, once again, fuel a market boom.
“While it’s unlikely that the boom will be as big as it was during the Stamp Duty holiday, the tax relief might be enough to persuade some people to pursue their homebuying aspirations despite the current economic climate.
“That said, we simply can’t ignore the fact that many lenders have already started to withdrawn some product offerings in anticipation of further interest rate hikes and this will undoubtedly stifle the level of buyer activity seen across the market for the foreseeable future.”
Meanwhile, agency software company and CRM tool Property and Tenant Manager (PaTMa) has revealed data showing a rise in agents dropping prices on listings.
Its founder Simon Pither shared images on Twitter showing the percentage of properties with a price reduction per week approached 16% towards the end of September.
That is up from 12% at the start of August.
The figure was below 10% back in March, while the proportion of increased pricing on listings is at below 2%.