House prices this month remain largely unchanged, but according to the latest data, the housing market is starting to show signs of slowing down. With this in mind, now could be the right time to sell your home and capitalise on recent gains.
What’s happening with house prices?
From May to June this year, the latest Zoopla House Price Index shows that house prices have risen by only 0.1%. This is the lowest rate of growth since December 2019. The growth in Q2 2022 is 1.4% – this is the slowest quarterly rate of growth since March 2021.
Over the last two years we have seen house prices rise at an unprecedented rate. The race for space and lack of supply has dominated the housing market. With latest figures in mind, the rapid rate of growth appears to have finally peaked. Year on year to May, property prices were 8.4%, compared to 9.2% in April.
Demand is still high at 40% which is higher than the five-year average. However, this also starting to decline.
With that in mind, sellers should act now to take advantage of the gains made during the pandemic-driven market.
Asking price reductions
The number of properties where asking prices have been lowered is also increasing. In May, only around 5% of properties showed a reduction in price, in April this was 4.7%. At the same time, the number of agreed sales is over 20% higher than the five-year average making this a good time to sell your home.
Mortgage rates
Mortgage rates have risen five times since December 2021 and they are likely to rise again this year. The Bank of England is due to make another announcement on 4th August – interest rate announcements are usually made every six weeks, around eight times a year. Experts predict that the base rate could rise to between 1.5% and 3% by the end of 2022.
This means that mortgage rates are likely to climb further, making borrowing less affordable for many and forcing people to put their plans on hold as the prospect of higher mortgage payments looms. This, coupled with the rising cost of living, high energy bills, fuel price rises, and rising inflation means that the market is likely to slow down house price growth.
Selling speed
The average time to sell a property in the UK is also rising. At present it is taking 22 days to sell a property compared with 20 days in March. The time it takes to get to the point of exchange is currently 170 days – just over five months. So, if you want to be in a new home for Christmas, now is the time to sell.
House price growth in Scotland
In Scotland, house price growth was 6.1% in the twelve months to May 2022. In Edinburgh it was 4.3%.
Clyde Property is a leading independent, multiple award winning estate and letting agent with 30 years’ experience in selling and letting property in Scotland. Just call your local Clyde Property branch today, for friendly, impartial advice on finding your next dream home.
