Latest property sentiment index reveals their levels of confidence for the housing market
Despite soaring inflation and the prospect of further interest rate rises creating sizeable headwinds for the housing market, buyer and seller sentiment remained strong in June, according to the latest Property Sentiment Index by property search portal OnTheMarket.
The report revealed that in June, around eight in 10, or 81%, of property sellers said that they were confident that they would sell their property within the next three months. This is a slight decrease when compared to May’s 82%.
The ratio of confident sellers varies depending on the period within which they are supposed to sell their properties: 14% of sellers were confident that they would sell their properties within the next six months, 2% for those that hope to sell within the next nine months, and 3% of sellers were confident that they would sell theirs within the next 12 months.
On the buyer side, 75% of active buyers in the UK said they were confident that they would purchase a property within the next three months. This figure was unchanged when compared to that of May.
Some 18% of buyers were confident that they would purchase a property within the next six months, while 2% and 5% of buyers were confident that they would be able to buy within the next nine and 12 months respectively.
“A subtle rebalancing of the market inevitably continues as stock levels keep rising, partly down to the seasonal effect of summer when more homes traditionally come to market,” Jason Tebb, chief executive at OnTheMarket, said.
“This is leading to a steadier, more manageable environment after the frenzy of the past two years, a ‘new normal’ or elevated version of the pre-pandemic market.
“The readjustment in the housing market is inevitable as more stock becomes available and this will likely take several months for the effects to be seen. Whatever happens, those most serious about transacting will get on and do so.”
Tebb pointed out that even during the financial crisis of 2008, where residential transaction numbers halved compared with the previous year, there were still hundreds of thousands of sellers who moved because they had their reasons for doing so.
“While there are different headwinds facing the market now, these are not yet impacting the need or desire of many to move,” he said. “HM Revenue & Customs reports that transaction numbers have stabilised in recent months, but they remain somewhat elevated compared to before the pandemic.”
The report on property sentiment also showed that in June 2022, six in 10, or 60%, of properties were Sold Subject to Contract (SSTC) within 30 days of first being advertised for sale. This percentage is slightly lower when compared with May’s 61%, but is higher when compared with 57% in June 2021.
Tebb said the June 2022 figure is particularly interesting as they did not expect this number to be as high as May’s figure due to potential distractions such as the approaching summer holidays and children taking a break from school.
“Given that the figure was 61% in May, the reduction is extremely slight and it’s surprising how strong it remains,” he said. “With properties selling as quickly as ever, the data further underlines how the most keen and motivated are getting on with the business of moving.”
OnTheMarket also reported that in June 2022, only 4% of homemovers were concerned about securing a mortgage to fund the purchase of their next property.
The report further revealed that at 42%, Greater London had the highest number of respondents who already had their mortgage agreement in principle in place prior to starting their search for a property. The South West and Scotland jointly had the lowest number at 29%.