Price growth in the UK domestic market slowed in the three months to June as buyers became warier of rising housing costs and supply remained flat. Average prices rose 0.7% in the second quarter, compared to 3.5% in the three months prior to March.

This has been the slowest quarterly growth since the market opened in May 2020 after it closed. This meant that the annual change fell to 8.2% from 11.3% in March.

“Quality products are flying off the shelves, attracting competition, but homes with minor issues, such as road noise, which you would have been flying off of last year, are no longer moving quickly. In that sense, the market is adapting,” said Ross Davies, head of the company. office in Knight Frank’s Tunbridge Wells.

The country’s market has experienced a boom over the past two years as the pandemic has increased demand for space and green roofs. With this, in the first quarter of the year, after a period of double growth, the average real estate price on the national market rose again. Price growth outside London was barely noticeable before the boom in the global central London (PCL) market following the global financial crisis in 2007. However, this gap has been covered by rising average prices over the past two years. From the beginning of 2020, 18% in PCL and 20% in the national market.

While the sentiment is easing amid concerns about rising costs of living, including higher mortgage rates, there is still plenty of stress in the system. Sales were strong as shelves emptied quickly during the stamp duty holiday and some retailers stopped coming to the market due to a lack of shopping opportunities, creating a vicious cycle of stocks. In June, the number of active customers remained the same compared to last year, and the improvement of their applications has led to an increase in contracts. The number of offers received in the quarter was the highest since the second quarter of 2021 when the post-tax holiday closure led to unfavorable market conditions.

The Bank of England will follow the bank’s decision next month, but the five-year fixed-rate loan (75% LTV) rate has risen by two percentage points over the past year to 2.7% ahead of a continuation forecast increase.

“We have very keen buyers who want to secure something and close a deal before house prices rise. Now that the supply has improved, they feel they have seen a good selection of properties and have decided to move,” said Mark Proctor. , Knight Frank’s South West Regional Manager.

The gap between potential buyers (demand) and new orders (sales) was the smallest in the three months to June since the start of the pandemic. Compared to the five-year average (outside 2020), new potential buyers were +18.8% and new orders +6.9%. We expect that this and the rise in economic securities will suppress prices in the second half of the year and that the country’s annual growth rate will be 7% this year.

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