Is our desire for a holiday in the sun affecting house prices in Chelmsford?

When it comes to getting our travel legs back post-pandemic, this year has certainly seen us returning to our jet-setting norms. According to the Office of National Statistics {ONS}, UK residents made 5.6 million visits overseas this April compared with 260,000 visits by air in April last year. Travel chaos has been covered extensively in the press, but this has not halted our lust for some fun in the sun. But, as frantic as the property market has been in recent months, as soon as the school holidays started, buyers and sellers seem to have become distracted, with their priorities  switching to enjoying their summer months and putting their home-move plans one hold until autumn. Has our desire for a holiday in the sun this year affected house prices in Chelmsford?

Is it due to tradition?

Rightmove’s latest House Price Index was released a few days ago, with some fascinating data regarding the current property market. According to their research, for the first time this year we have seen the average price of a property coming onto the market fall by 1.3%. This does follow the traditional trend of a drop in prices in August and is on a par with the 1.3% over the last ten years.

One thing that we have noticed with sellers who are wishing to complete their move before Christmas is that they are keen to market their home competitively. Autumn is a time when buyers and sellers are conscious about timescales: there is a huge desire to not be moving too close to Christmas and yet wishing to be in their new home for the holidays. In a move to entice the most suitable buyer, they are very conscious of the sale price presented in a hope they can complete under the current average number of days to completion of 136.

“A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays. Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic. Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home. To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and a half months. Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end the year at around 7% annual growth, even with the wider economic uncertainty.” Tim Bannister Rightmove’s Director of Property Science

Are interest rates playing a part?

The cost-of-living crisis is seeing every family take stock and monitor their spending, and the announcement of yet another interest rate rise, the sixth consecutive, sees the rate now stand at 1.75%. There is no doubt this will be on the minds of home movers as they analyse what they can afford to borrow and, more importantly, repay each month. In the property market, there remains a divide between supply and demand, and it is this that is having the largest influence on asking prices.

Although, according to Rightmove’s House Price Index, buyer demand this month is 4% lower than 2021 , it is still 20% higher than seen in 2019.  The number of new properties coming onto the market continues to increase, with figures showing a 12% rise on the same period last year. The interest rate rise doesn’t seem to have made buyers nervous either, as the number of buyer enquiries has, in the most part, stayed the same, demonstrating their commitment to move home regardless of the rate rises.

“Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years. It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move. Demand has eased a degree and there is now more choice for buyers, but the two remain at odds and the size of this imbalance will prevent major price falls this year. For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow and find out about the rates available to them to assess what they are able to repay each month.” Tim Bannister Rightmove’s Director of Property Science

Getting serious

As the calendar dates get crossed off and the ‘back to school’ reality returns we expect a rise in the number of people within Chelmsford seeking to move home. Predictions suggest that house prices may start to fall this autumn, although there have been no obvious signs this has started, and our local property market remains robust. There are steps you can take to ensure you place yourself in a strong position, and for advice on your personal circumstances please contact our team at Charles David Casson on 01245 835859 for an honest and constructive conversation.