Buyer demand levels started to decline in the third quarter as economic pressures and the increased cost of borrowing caused many people to reevaluate their home buying aspirations, the latest data from GetAgent reveals.
The latest index shows that buyer demand across England is currently at 57%, which marks a 5% decline since Q2 and a 7% decline compared to the same period last year.
GetAgent suggests 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, which sits at 74%. This represents a 5% decrease on Q2’s figure, but 7% higher than this time last year.
Hampshire is another sales demand hotspot with demand currently sitting at 65% while Northamptonshire, Bath and 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 with demand down 19%, Herefordshire down 15%, and Lincolnshire down 14%.
Only three regions of England report positive annual demand growth. These include the City of Bristol with 7% growth, the City of London with 4%, and Greater London with 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%.
GetAgent co-founder and chief executive Colby Short comments: “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 [stamp duty] 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 withdraw some product offerings in anticipation of further interest rate hikes. This will undoubtedly stifle the level of buyer activity seen across the market for the foreseeable future.”