The St Albans housing market over the last three months is now becoming more ‘normal’ after the last couple of years of incredible demand when lockdowns started a race for space. Even with the blackening economic doom-mongers forecasting a harsh slowdown in the British property market, the number of people buying and selling their homes is still very good for the time of year.
Better than anticipated
Whilst some homeowners are reducing their asking prices, it is not the 20% – 30% drop some property commentators had predicted. Looking at the stats for St Albans for the last three months since the disastrous Truss mini budget they make good reading. Of the 321 St Albans properties that have sold (stc) since late September, the average length of time it took to achieve a sale was 43 days.
The latest sold price data from the Land Registry shows that St Albans house prices currently remain 12% higher than they were 12 months ago, although the rate of growth has dropped significantly. Last month, St Albans house prices only rose by 1.3%, thus we are seeing the first sign that the property market is starting to cool.
What we can expect with house values & rents
With Bank of England interest rates at 3.5% and further increases possible in 2023, that will undoubtedly spur ongoing cooling in property values yet it’s doubtful we will see the St Albans property market go into the deep freeze. As I said in an article on the St Albans property market before Christmas, it’s likely we will see a 5% to 10% reduction in house prices over the next 12 to 18 months, which will only take us back to the prices achieved in mid/late 2021 or early 2022 (depending on property type). That said, with there being a lot of pent-up demand still in the market prior to September’s budget, I would expect this reduction to be recovered pretty quickly.
Landlords have experienced double-digit rent growth in the last 12/18 months with a shortage of rental properties coming onto the market. I cannot see this changing in the short term, so I expect rents to be a further 5-10% higher over the same time period.
Steady as she goes…
Previously I stated it is not always wise to only focus on house prices but also take reference from the number of property transactions completed. For example, in March 2021, 135,670 properties sold, yet a month later, this dropped to 87,600. A couple of months later, it rose again in June 2021 to 165,290 for it to drop to 64,000 in July. So there has been quite a high level of turbulence on transaction numbers, which can skew the property market and put undue pressure on it.
Like most things, slow, steady and consistent is the preferred option for any market, and this is no less true for the property market. Throughout 2022, the number of properties selling in the UK has been a steady average of 68,832 per month, ranging from a low of 61,800 in January 2022 to 72,200 in July 2022. This consistency will continue into 2023 and a return to a more ‘normal’ housing market.
Are mature homeowners under greater pressure?
One final thing I have noticed about the St Albans property market in the last six months is the number of larger properties coming onto the market that last sold over 25 years ago. Homeowners in their 20s, 30s and early 40s tend to move every five or six years, yet when they reach their late 40s and 50s, they tend to stay put for longer. These properties only tend to come on the market when people pass away or must be sold for nursing home fees.
These mature homeowners are now downsizing for several reasons. Firstly, their children have flown the nest and they are rattling around in homes with accommodation they don’t need. Secondly, the mounting cost of energy bills, high inflation and never-ending maintenance costs that larger properties demand is becoming a significant burden. Finally, the recent rise in St Albans house prices has meant that the amount of money released to help downsize has grown, meaning if these mature homeowners sell up and cash in for more manageable properties, the amount of money released is higher, which will support ongoing expenses and possibly financially help family members get on the property ladder themselves.
Final thoughts
2023 is going to be a more ‘normal’ year, akin to 2016 and 2019. St Albans homeowners need to be realistic with their pricing, though, to ensure they can attract sufficient interest to sell their property. If you are considering selling your St Albans home in 2023 and would like a chat about your options, feel free to drop us a line or call the office.
