Wellingborough Property Market Update – August 2023

11 months ago
Wellingborough Property Market Update – August 2023

Despite the very steady start to the year, where asking prices of properties for sale in Wellingborough remained at around £276,600 for the first five months, we have now seen a three-month trend of falling asking prices from the peak of £277,653 in April this year to £265,861 in July.

This represents a drop of £11,792 (4.3%) over that time though still broadly in-line with the asking prices of August and September 2022 (£262,464 and £268,225 respectively).

New vendors are seemingly being more realistic with asking prices too with them following closely with other properties that are already on the market.
There is still quite a large gap between the average asking price of NEWLY listed properties and asking prices of SOLD properties which stands at £36,009 for July 2023.
The whole of 2023 so far, this average stands at £35,928 (15%)

For the whole of 2022, it was £27,599 (11%)

For the whole of 2021, it was £18,035 (7.9%)

I believe this gap needs to reduce by either increasing buying power or reducing asking prices for a stable market to emerge.

In all likelihood, I think that mortgage rates are going to be about as low as they will be for a while, which means asking prices will need to come down a little further – around 5-10% – so that there will be enough buyers (not just those lucky enough to be able to get a great rate) who are able to fulfil the supply of homes.

If asking prices were to drop by 5%, is would put them at £252,568, or around the same price they were in November 2021 (£251,019).

A 10% drop would put them at £239,275, or around the same price they were in September 2021 (£242,058).

Below is an overview of some of the 2023 house price predictions from leading market commentators:

According to Nationwide’s House Price Index, the average UK property price was down 3.5 percent year-on-year in June 2023. Additionally, Halifax’s data showed a year-on-year fall of 2.6 percent in the same month.

As we can see from the table below, the number of reduced properties in Wellingborough (87 or 12.5% of all properties for sale) has now exceeded the percentage of sold properties (53 or 7.6%)

This leads me to believe that the market is still correcting itself and buyers are being more cautious with committing to a new home until they see how interest rates, inflation and general cost of living develops over the coming months.

If the prices continue to decline at a similar rate during the second half of the year, it is possible that the annual drop could fall within the predicted range of five percent to 10 percent, as forecasted by the market commentators. However, it is essential to keep in mind that property markets can be influenced by various unpredictable factors, and actual results often differ from predictions.

Lettings

There is some better news for Wellingborough renters. The average asking price for a rental property dropped by £9 in July to £832. Whilst that may look an insignificant amount, it is £38 PCM drop from the peak of £870 in April this year.

In less good news, it is still £45 (5.7%) more than 12 months ago and £129 (18.3%) more than in January 2021.

Whilst there has been a drop in asking rents, I can’t imagine this will be a long-term trend.

Mortgage rates are increasing, regulation on rented properties is increasing and the recent changes in capital gains tax and the scrapping of tax relief on buy-to-let mortgages are all driving some landlords to sell up and leave the rental market entirely, which will ultimately affect supply negatively.

According to research conducted by Simply Business, 61% of landlords sold a property in 2022 or are planning on selling a rental property in the near future with only 23% of landlords saying that they intended to purchase an investment property to rent out.

This could lead to supply and demand issues, ultimately resulting in higher rents. Recently, Knight Frank predicted rent rises to slow over 2023 and beyond, but still rise by around 4% for the rest of the year.

All data from this post is sourced from Zoopla Pro

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