London Buyers Take Pause But Sellers Remain Steadfast
With the next Bank Rate decision from the Bank of England set for September 21—predicted to be the last of the 14 consecutive rises since December 2021—London buyers are holding their breath while, on the opposite end, sellers continue to bring new inventory to the market.
The latest market analysis from London brokerage Chestertons revealed a 3% drop in new buyers entering London’s property market from July to June. The luxury real estate agency attributed the decrease to a general hesitancy from potential homebuyers who were awaiting the Bank of England’s official decision to raise interest rates early in July.
Despite buyer uncertainty, sellers have seemingly remained undeterred, with the number of new properties entering the market seeing a sizable increase.
This puts the market at something of a “wait and see” moment as house hunters keep a watchful eye on interest rates and sellers stand by and hold out for a new wave of buyers.
- Despite less activity from buyers, property viewings had a marginal fall, down 3% from June. However, June was a particularly strong month for showings, having increased 19% from the month before.
- As viewings hold relatively strong, a 38% decrease in sales falling through in July compared to last month may indicate a buildup of patient buyers who are waiting for the right moment to strike.
- The latest figures from the Office for National Statistics (ONS) showed that inflation fell to 6.8% in July, from 7.9% in June and 8.7% in May.
- As of September 1, there were 5,338 residential mortgage deals on the market, according to data provider, Moneyfacts. This is in comparison to 5,056 a month prior as lenders reintroduce deals as the market settles.
- The latest data reflects similar circumstances seen in June, when the number of prospective buyers decreased by 15% from a month earlier and the number of properties for sale increased by 9%.
The Big Number: 10%
The increase in properties being put up for sale is 10%, confirming a continued willingness from homeowners to put their properties on the market.
“With the Bank of England confirming the 14th consecutive rise in interest rates in a row, buyers have been more cautious and paused their property search in order to adjust their finances. Yet London continues to see buyers who are eager to keep hold of their previously secured mortgage rate and remain committed to finding a property and making an offer as soon as the opportunity arises.” —Matt Thompson, head of sales at Chestertons.
Although London’s market may be hanging in the balance, the increase in seller inventory and the buildup of interested buyers point toward a potential rebound.
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