Buyer demand and agreed sales increase but price expectation gap remains

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Propertymark’s Housing Insights Report for this month showed an increase in the number of would-be homebuyers registering with estate agents in July, as well as an increase in the volume of agreed property sales.

The average number of new buyers registering with each affiliated real estate agency rose to 71 in July from 69 in June, according to the data.

However, the number of views remained roughly the same at 93 per branch, and the average number of views per property was roughly the same as the previous month.

In July, each real estate agency branch had around 10 properties up for sale, unchanged from the previous month.

Similarly, the average number of homes available for sale per branch remained unchanged at 41 units.

Looking at future housing stock, the data shows that an average of 22 market appraisals were carried out per branch in July.

Propertymark’s report also revealed that the number of sales contracts increased by 5% in July to an average of four per branch, but the gap between asking price and selling price widened.

The data also revealed that demand for rental properties decreased slightly in July, with registrations per branch falling from 99 in June to 88 in July.

On the other hand, the supply and demand balance improved slightly due to an increase in inventory, but the average number of new rental property listings continued to decrease.

There were roughly eight applicants per rental property, down slightly from nine a month ago.

Although the number of lease signings decreased slightly, the impact on overall rent increases was limited, although there were regional differences: In July, 44% of members reported that their rent prices had remained stable, while 15% reported that their rent prices had decreased.

Rent arrears have increased slightly, with Propertymark members saying around 2.5% of fully managed properties with rent collected or managed are in arrears with payments.

The invalidity period was reduced from two and a half months to just over two weeks.

Nathan Emerson, CEO of Propertymark, said: “July began with a new administration and the prospect of a reset in key housing policy areas. Despite this, and a wetter than average July, the home sales sector saw an increase in prospective buyer registrations and an increase in the number of sales contracts. Other sales indicators were broadly stable, reflecting seasonal trends and the prospect of interest rate cuts in August. While underlying demand remains strong, the gap between buyer and seller expectations persists.”

“The residential rental sector saw a 10% fall in registrations of prospective tenants, partly due to the holiday season. Still, there were eight registrations for every vacant property. New instructions are on a downward trend, indicating potential further supply constraints and the need for policies to support and incentivise private landlords.

“The new administration has inherited a lengthy ‘to do’ list which requires urgent intervention in several policy areas. Priorities include improving the home buying and selling process, regulating estate agents, providing clarity on net zero funding and stabilising investment patterns in the private rented sector. We look forward to working with the new administration to tackle these and other issues.”

Dr Andrew Robert Watson, senior researcher at Propertymark, commented: “Labour promised in its manifesto to ‘reform the UK economy to jump-start economic growth’, but July’s key economic figures highlight the scale of the challenge ahead.”

“Inflation (CPI) rose 2.2% in the 12 months to July, remaining close to the Bank of England’s target. However, the homeowner housing cost component of CPIH rose 7% in the 12 months to July 2024, pointing to continuing challenges for homeowners. Although a base rate cut in August is widely expected, the base rate remained at a 16-year high.

“GDP estimates show the economy grew by 0.6% in the three months to June, faster than the euro zone but slower than the United States. With the autumn budget due in October 2024, we don’t have to wait long to hear the new government’s plans to ensure stability and growth.”