Wellingborough Property Market Update – September 2023

Between October 2022 and June 2023, the average asking price of properties for sale in Wellingborough remained above £270,000, peaking at £277,757 in December. In July and August this year, they have dropped to £265,861 and £264,334 respectively. From the peak to the current asking price, the drop is £13,423 (or 4.8%).
Whilst this seems like a significant drop, the asking prices still remain at about the same level as they were in August and September last year (£262,464 and £268,225 respectively).

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 £40,379 (or 18.7%) for August 2023.
The whole of 2023 so far, this average stands at £36,485 (13.4%)

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 £251,117, or around the same price they were in November 2021 (£251,019).

A 10% drop would put them at £237,901, or around the same price they were in August 2021 (£235,925).

As we can see from the graph below, not only is the trend in the number of vendors who have reduced their asking prices increasing, the amount they are reducing by is going up too.

In August, the average price reduction was £20,987 on 79 properties, for a total of £1,657,973.

All properties for sale in Wellingborough had a total asking value of £182,390,460, so these reductions equate to 0.91% of that.

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 price reductions continue for the rest of the year, it is possible that the annual drop in house prices could fall within the predicted range of five percent to 10 percent, as forecasted by the market commentators.

Lettings

The average asking rent in Wellingborough rose from £832 in July to £905 in August.

Not only is it a month-to-month increase, it is also an increase of £108 (13.6%) from the same month last year and £202 (28.7%) from when I started collating the data in January 2021.

I can’t imagine this will trend will change any time soon.

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