There is always a perception that when it comes to moving home, the majority of people are looking for more space, therefore the recent findings by Rightmove and Zoopla make very interesting reading. It is clear that buying habits changed during and post pandemic, but throw the cost of living crisis and higher mortgage rates into the mix and buyers’ attention has been diverted. One thing is very clear, and that is that the housing market today is in a different place than it was a year ago. What is happening in the housing market to see an increased desire for smaller homes?
The property market
There is still an air of caution within the property market at the moment. Easter is one of the most popular times of the year to place homes on the market. The nicer weather (hopefully) is on its way, gardens start to come into bloom and people dream of spending the summer months in their new home. But this year things certainly feel different.
The average price of a property coming onto the market in March is £365,357; this is 0.8% rise, but below the 1.0% average monthly rise that has been seen in March over the last 20 years. Regardless of these figures, Rightmove suggest that “data continues to point to a market on a much more stable footing than many anticipated”, which is good to know should you be considering selling your home.
“The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022. The pace of the market reached an unsustainable level in the last two years and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-Budget. While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring buying season.“ Tim Bannister Rightmove’s Director of Property Science
Demand for three-bedroom terraces
In recent research by Zoopla, they find that this year there has been a shift in demand for certain property types. The 3-bed terraced has been the most sought-after property over the last three months; this is due to their accessible price and balance of indoor and outdoor space. With finances being stretched, we can see how buyers who may have once preferred a semi-detached property are now turning to a 3-bed terraced as they are (according to Zoopla) 16% cheaper.
In contrast, demand for the once popular detached home has seen them receive only 9% of buyer enquiries even though they make up 21% of the homes on the market. This may not be a shift in what buyers want but a pause on moving by buyers until later in the year for those who are looking to upsize their homes. Speaking to these buyers, we know they want to see if the economic outlook will be brighter in a few months’ time and mortgage rates will be more favourable.
Race for space
It is clear that the ‘race for space’ has been swapped for value for money. We are seeing that buyers have toned down their wish lists and are thinking more minimalist. Space costs, whether that’s square footage, heating, furnishing, decoration, the greater the space the greater the costs. Rather than desiring bigger, we have noticed buyers focusing on rightsizing – thus what size of home do they realistically need to live and work (should they work from home).
Buyers are more open to doing work now than in previous years, with data from Zoopla showing that fixer-uppers are receiving 51% more enquiries than homes that have been recently renovated. Parking has always been a must on buyers’ wish lists, but here there has also been a shift, with searches for homes with driveways and private parking a third lower than properties with only on-street parking.
Things evolve
There may still be an air of caution in the property market, but there is more stability than predicted last year. That being said, there are regional variations, which means this is a property market that is evolving based on local factors and the economy. These findings from Rightmove and Zoopla are great to give you an overall sense of the shift in buyer demand, but this isn’t always the full story. To gain a realistic insight into what is happening in Bromley we would always advise that you speak to a local estate agent. Contact a member of our team on 020 8467 8304.