Signs the real estate market boom is fast fading
Pandemic trends are reversing
Rising house prices and interest rates, which hit a 13-year high this month, mean mortgage costs have soared. The cost of monthly repayments for a new mortgage on an average home has jumped £71 since the start of the pandemic to £852.
The average salary needed to get a mortgage on a £250,000 property, based on borrowing at 4.5 times income, has jumped by £4,500 over the same period.
Real estate prices are still supported by the persistent imbalance between supply, down 37 pc compared to the five-year average, and demand, up 61 pc.
But the balance begins to shift. The volume of new offers coming to market increased by 7% compared to the five-year average. Demand for homes outside London, previously the fastest growing market, also fell 2% year-on-year.
There are clear signs that pandemic trends are reversing. Demand for flats in London, which were the underdogs in the property market following the foreclosure, jumped 16%.
Vincent Dennington, of John D Wood estate agents, said: ‘We are starting to see more and more price reductions on property portals which is perhaps a first indication that the market is slowing down.’
The trend also suggests overly ambitious sellers have priced properties too high in the wake of the pandemic housing boom, he added.
The highest growth rates in asking prices were concentrated in the most affordable markets, which have the most room for values to rise. Nottingham has seen the fastest growth in asking prices of any city in the country, with values climbing 10% year-on-year. It was followed by Liverpool, Birmingham and Manchester, where the respective increases were 9.9%, 9.7% and 9.6%.
Warrington, Cheshire was the best performing small town, with growth of 12.9%. It was followed by Wigan in Greater Manchester, where the rate was 12.2%.