Homebuyer demand levels drop in Q3
The latest Homebuyer Hotspots Demand Index by estate agent comparison site, GetAgent.co.uk, has revealed that buyer demand levels were on the decline in the third quarter of 2022 as economic pressures and the increased cost of borrowing cause many people to reevaluate their home buying aspirations.
GetAgent’s Hotspots Demand Index monitors homebuyer demand across England on a quarterly basis. Current demand is based on the proportion of stock listed as already sold (sold subject to contract or under offer) as a percentage of all stock listed for sale. E.g, if 100 homes are listed and 50 are already sold, the demand score would be 50%.
The latest index shows that across England, buyer demand is currently at 57% which marks a -5% decline since Q2 2022 and -7% decline since this time last year, suggesting that the long-lasting pandemic market boom might finally be fizzling out under the pressure of economic difficulties.
England’s strongest sales demand hotspot is currently the City of Bristol where it sits at 74%. This is -5% lower than Q2 of this year, but 7% higher than this time last year.
Hampshire is another sales demand hotspot with demand currently sitting at 65% while Northamptonshire, Bath & North East Somerset, Gloucestershire, Wiltshire, and West Sussex are all reporting Q3 demand levels of 64%.
In terms of annual change, the worst hit places are Cornwall (-19%), Herefordshire (-15%), and Lincolnshire (-14%).
In fact, only three regions of England are reporting positive annual demand growth. These are the City of Bristol (7%), City of London (4%), and Greater London (1%).
As for quarterly changes, the only place to report positive growth is the City of London, up 1%, while all other regions have seen demand drop. The biggest of these drops are found in Worcestershire, Cornwall, Northamptonshire, Leicestershire, and Bedfordshire, all of which are reporting demand declines of -8%.
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “The property market has been awash with buyer activity for some time now, with low rates of interest and various other incentives, such as the stamp duty holiday, ensuring that demand for homes has been unwavering.
However, our latest index suggests that these red hot market conditions have started to cool under the significant weight of economic difficulty coupled with a very real cost of living crisis.
We’re yet to see what effect Liz Truss’s new wave of stamp duty tax breaks is going to have on the market. There is a chance the measures will, once again, fuel a market boom. And while it’s unlikely that the boom will be as big as it was during the SDLT holiday, the tax relief might be enough to persuade some people to pursue their homebuying aspirations despite the current economic climate.
That said, we simply can’t ignore the fact that many lenders have already started to withdrawn some product offerings in anticipation of further interest rate hikes and this will undoubtedly stifle the level of buyer activity seen across the market for the foreseeable future.”