The latest Homebuyer Hotspots Demand Index by estate agent comparison site, GetAgent.co.uk, has revealed that buyer demand levels are on the decline in the fourth quarter of 2022 as economic pressures and the increased cost of borrowing continue to force many people to reevaluate their home buying aspirations.
GetAgent’s Hotspots Demand Index monitors homebuyer demand across England on a quarterly basis. Current demand is based on the proportion of stock listed as already sold (sold subject to contract or under offer) as a percentage of all stock listed for sale. E.g, if 100 homes are listed and 50 are already sold, the demand score would be 50%.
The latest index shows that across England, buyer demand is currently at 48.3% which marks a -9.2% decline since Q3 2022 and -17.3% decline since this time last year, suggesting that the pandemic-inspired property boom is being brought well and truly back down to earth by the significant economic pressures facing the nation’s would-be homebuyers.
England’s strongest sales demand hotspot is currently Durham where it sits at 68%. This is -5.6% lower than Q3 of this year, but -14.6% lower than this time last year.
City of Bristol, which ranked as the number one sales demand hotspot last quarter, now ranks second with 56.6% while Surrey (56.4%), Greater London (55.9%), and the City of London (54.8%) all maintain good levels of demand despite all experiencing quarterly and yearly declines.
In terms of annual change, the worst hit places are the Isle of Wight (-25.5%), East Riding(-25.5%), and Derbyshire (-24.8%).
The worst hit places in the last quarter are East Riding (-12.9%), Bedfordshire (-12.8%), and Staffordshire (-12.7%).
In the search for good news, optimism is hard to come by. No parts of England have experienced sales demand growth in the past year or the past quarter.
The smallest annual declines have been reported in Lincolnshire (-4.7%), Leicestershire (-8.0%), and Suffolk (-9.8%), while the smallest quarterly declines are in Suffolk (-3.6%), Durham (-5.6%), and Wiltshire (-5.9%).
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented:
“After a couple of years of manic demand, activity, and price increases, we end 2022 with a gentle bump back down to earth. Economic gravity was always destined to enforce the declines we’re currently seeing and, in many ways, it’s a surprise that it’s taken this long to happen.
You’re going to read all sorts of pessimistic property headlines over the coming months, but the forecast isn’t actually that bleak. Look at the long-term history of house prices and you’ll see that the property market is never down for long, regardless of how many pandemics and economic crashes are thrown its way.
However, the fortunes of the housing market are very much in the hands of the Bank of England at the moment because, until interest rates come down and borrowing becomes more affordable, lenders are going to be tighter with their mortgage offers and buyers are going to be nervous about taking on these relatively high levels of risk.”
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