Cheadle Property Market Update March 2022
Trying to find some positives from March hasn’t been easy. Well, I suppose the weather has been a bit warmer, the clocks went forward, so it is lighter a little longer in the evening and a new Starbucks opened on Cheadle High Street. But that’s where the positivity ends, as March saw the continuing awful situation in Ukraine with the ensuing humanitarian crisis it has caused and at home the cost of everything going through the roof, plus a third interest rate rise in as many months and things only going to get worse for people into April as the current energy cap is lifted and we can all expect to see massive rises in the cost of our gas and electric and the new national insurance increases hit at the same time.
Ironically, the housing market continues to buck the trend, although many Analysts have called this the peak of the property boom as house price growth in March hit its highest level in 18 years.
Average sale prices rose 14.3pc year-on-year, according to mortgage lender Nationwide, a pace of growth that exceeded the highs of the stamp duty holiday rush in June last year, when growth hit 13.4pc.
Homes in March cost £265,312, a jump of £33,178 compared to this time last year. In a single month, prices increased by £5,082.
Robert Gardner, of Nationwide, said: “We still think that the housing market is likely to slow in the quarters ahead. The squeeze on household incomes is set to intensify, with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.”
Strong labour market conditions will also encourage the Bank of England to raise interest rates further, he added. The pace of growth can be hard to reconcile against forecasts of the steepest fall in real disposable incomes on record this year.
“The housing market has maintained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs,” said Mr Gardner.
So, what trends are we seeing in our micro market of SK8 and SK3
Uncertainty creates Inertia
What is very clear is that the current situation is making potential sellers twitchy and for the time being at least, sit tight. As you can see from the new listing comparison image below, there were only 158 new listings in March, compared with 237 in March 2021, a reduction of 33%. Most notably are the lack of new semi-detached houses which are down 53%, followed by flats down 40% and detached homes down 22%
Whilst in the short term, that is good for those selling now, there is a view amongst property commentators, that more homes will start to filter onto the market in Q3 and Q4 of 2022, as the cost of living crisis really starts to hit families hard and many may have to take the difficult decision to sell their homes and downsize to reduce cost and financial pressure, which in turn could lead to a cooling in prices.
Demand continues to outstrip supply – at least for now!
Our second image looks at the average number of available properties during the month and the number of daily property views on Rightmove.
The number of available houses dropped from 625 in March last year to just 413 in 2022 – a drop of 34%, whilst the number of detailed daily property views dropped just 5% from 203 to 192, which when you look at the available stock, would suggest, for now at least, there are still plenty of people looking to buy a property. Despite the rises in interest rates, money is still relatively cheap to borrow, the acid test over the coming months may be how much disposal income they will have available to increase their future borrowing?
The rate of increase locally has started to slow
When you look at the third image, you can see the year on year to March, the rate of house price inflation has dropped, although detached semi-detached homes are still showing healthy growth, the rate of increase for flats and bungalows has dropped. These stats are of course slightly skewered, and the upward trajectory continues, but the rate of increase has slowed down.
Where are the gaps in the market?
The final image looks at the number of properties sold in the area. The first thing to look at, which of course reflects the low stock levels is the 35% drop in sales from last March to this March – 275 to 179.
The number of detached homes sold in March was down 40% on last year, semi detached homes down 36%, terraces 43% and bungalows down 48%. Bizarrely, and against all other metrics the number of flats sold in March 2022 is up 19% on last year. There can always be the odd month which throws up oddities in the figures, but in most previous months the numbers of flats being sold has similarly down in line with other types of property.
Looking at the statistical information available and the likely trends over the coming quarter, our view is if you are thinking of selling and want to capitalize on the strong seller market and achieve an optimum price, you need to be marketing your home now. The picture moving forward is looking increasingly uncertain and financial pressures will likely take their toll and the market may not be as buoyant in the second half of 2022 and many are saying the real price drop will kick in in 2023.
If you would like an idea as to the value of your home in 2022, please call Joe, Patrick or Maurice on 0161 428 3663, e-mail email@example.com or visit our website and choose from our three free valuation options following this link https://mkiea.co.uk/valuation/
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