We have already had five full months of 2023 to look at what may be happening in the Wellingborough property market, so these are my findings from the ZooplaPro data.
The average asking price of all properties for sale on the market (£276,062 for May 2023) have remained remarkably steady through the whole of 2023, sitting at £276,603 which is about £10,000 higher than the average for the whole of 2022 (£265,047). This to me suggests that the property market is finding it’s natural level.
The number of properties for sale are also on the rise, with 699 on the market in May 2023. The average for the previous four months of 2023 is 662.5 and for the whole of 2022, it was 598.75.
Whilst the average asking price of all properties for sale have levelled out over 2023, the average asking price of properties that are new to the market have fallen by £13,573 (4.8%) since the 2023 high of £283,618 in March, another indication that vendors are becoming more realistic with asking prices.
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From November 2022 until April 2023, the percentage of properties for sale that had a price reduction consistently fell from 10.3%, 6.0% (December is notoriously quiet), 10.1%, 9.8%, 8.9% and 7.3% respectively.
For the first time this year, we have seen a month to month increase from 7.3% to 9.6%.
I don’t find this too alarming, instead more reassuring.
It’s likely that most of these properties with reduced asking prices have been on the market for two or three months already and are just matching the market’s new natural level.
Although, there still seems to be some way to go.
![](https://woodheadandco.co.uk/wp-content/uploads/2023/06/Average-Asking-Prices-Of-Newly-Listed-and-Sold-Properties-in-Wellingborough-June-2023-1024x999.jpg)
The average asking price of NEW properties for sale in Wellingborough was £270,045 in May.
The average asking price of SOLD properties was £239,017.
This is a difference of £31,028 (13%). 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 10%, is would put them at £249,888, or around the same price they were in November 2021 (£251,019).
Has the housing market avoided a house price crash?
A big increase in the cost of mortgage borrowing would historically precede a fall in house prices.
But the impact of higher mortgage rates is less pronounced than in the past. This is thanks to mortgage regulations introduced by the Bank of England in 2015.
Anyone taking a mortgage since then has had to prove to their bank that they could afford a 6.5-7% rate, even if they were paying a 1-2% rate.
It’s as if the housing market has been operating at 6-7% mortgage rates already. This is a key reason we’ve seen only a small impact on house prices so far.
Now, most banks are testing buyers’ affordability for 8% mortgage rates or higher, which has limited demand and sale numbers in 2023.
The robust housing market activity in the last 2 months indicates that 4-4.5% mortgage rates are generally manageable for home buyers – despite this being double the rates of late 2021. But higher living costs are also eroding spending power.
Lettings
The average asking price of properties to rent in Wellingborough dropped by £41 (4.7%) in May.
Whilst this is good news for renters, it is still £96 (13.1%) higher than May 2022 and £126 (17.9%) higher than January 2021 (when I first started to compile the data).
![](https://woodheadandco.co.uk/wp-content/uploads/2023/06/Lettings-Data-June2023-1024x1012.jpg)
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.
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