I hope you’re keeping well and have had a good start to 2023! I’ve got a few charts and visuals for your eyes to take in today – who doesn’t love a line graph though?
Sales – Supply and Demand
Supply has dramatically improved whereas Demand is currently a little slow:
- Supply (New Instructions)
- Supply of properties has risen by 5.8% in the last year
- Supply is still 2.6% down compared to 2019 norms (Feb19-Jan20)
- In Jan 23 alone supply was 5.9% up on Jan 22
- Demand (Sales Agreed)
- Has been gradually falling month on month since March 2022, apart from the uptick last month
- Feb22-Jan23 demand was 13.6% down on prior year, but that time was exceptional (stamp duty holiday)
- Demand is 2.5% up on 2019 norms (Feb19-Jan20)
- Jan 23 demand is 14.8% down on prior year and 16.9% down on pre-pandemic (Jan 20)
- Demand v Supply
At 77% in year to Jan 2023, is heading back to 2019 norms (73%)
Sales – Asking Prices
Since January 2019, we’ve seen a growth in the average asking price of property being listed onto the market for sale.
- The average asking price of a property in January 2023 was £417,700.
- In the past 12 months, prices have increased by 6.7%
And 20% since 2019 – the equivalent of £70k
Sales – Time to Exchange
Is this the new normal that transactions will take longer as we see the average time to exchange rise dramatically?
- Nationally, Jan 2023’s average time to exchange is now 140 days (4.6 months)
- 42% higher than the 98 days in Jan 2020
- Looking like this is the “new normal” for the time being
- Why has time to exchange risen so much?
- The lack of supply and the time it takes a chain to form is significantly longer
- Conveyancers are still overstretched
Note – Time to exchange is measured by the lag in days between the last sale agreed date and the exchanged date
Sales – Fallen Through Transactions
Since the infamous mini budget of September 2022, the rate of fallen through sales has risen.
- Jan 2023’s fallen through was 27%
- Aside from Lockdown 1, this is the highest fallen through rate since the Global Financial Crisis of 2007-2009
There is no sign yet that fallen through rates are doing anything other than rising and consequently, it may be a new feature of the 2023 market
National Available Stock
- The overall volume of available lettings stock has been falling since July 2020
- In Jan 2023, available stock was 243k
- In Jan 2020, pre-pandemic, it was 376k
- Available lettings stock has fallen by 35% in just 3 years
- Increasing regulation in the Private Rental Sector, amongst other factors, has made many landlords divest
- This supply side, pitched against underlying demand for rental properties has created a perfect storm for the industry
Lettings – Supply and Demand
- Supply volumes have fallen by just over 5% in the last year as landlords divest due to factors including increasing regulation – such as EPC criteria
- Supply volumes are 23% down on pre-pandemic levels
- Is also falling, but less than supply – you can only rent what is available to rent
- We know that underlying demand is still strong because of price increases and time to let agreed reductions
- Feb22 to Jan23 demand volumes 1% down on prior year and 15% down on pre-pandemic
- Demand v Supply
Year to Jan23 is 72% of supply and this has risen from 69% prior year and 65% pre-pandemic
Lettings – Let Agreed Prices
Let Agreed Prices are continuing to rise and don’t look to be stopping. A lot of this is down to the supply v’s demand – not enough supply and too much demand. All in all, average prices are up by 7% in the last year and 24% since January 2020!