Deciding to move home is not usually made lightly. We have all experienced the upheaval, the seemingly never-ending list of people you need to inform of your new address, the sorting, clearing, packing. So what does make us take the plunge and buy somewhere new?
In general, there are two camps of home buyers: Those who are looking for somewhere new because they need to move and those who are looking simply because they want to, but perhaps, have plenty of time to find their ideal new home.
1 in 3 moves are due to need
Almost a third of moves were ‘need-based’ according to a survey of 10,400 home movers by the Property Academy in summer 2022, prompted by a growing family, job relocation, divorce, ill-health or bereavement.
In each of these cases there was an absolute need for that person or that family to move and as such they would have been under time pressure to move. This presents good sales opportunities as there is a time-bound need to move. As such those who are looking to buy a new property out of need are less likely to be able to wait around for the market to stabilise or for lending conditions to become less stringent. So, even in a market that is slowing down with high interest rates, less high LTV mortgage offerings and a cost of living crisis, there are still good opportunities for sales. Those discretionary buyers including first time buyers and investors might decide to sit tight for the moment and wait for things to settle down.
Current Market
In some respects, this difference is being reflected in the current market. According to the RICS residential Survey carried out in October 2022 there has been a fall in buyer demand and agreed sales. There was a big shift in respondents to the report suggesting that new buyer enquiries were dropping. This was at -36% of respondents (32% saying they saw and increase but 68% saying they saw a decrease) for the month before and then dropped to -55% as a net balance, but significantly there was a downward trend in all regions for the second month running. This has clearly filtered through to completions and the report showed that -45% of contributors to the report had seen a fall in completed sales which was a further increase in negative responses to the previous month which was -29. October also saw the first month that showed no growth in property prices according to those who replied to the survey. This was the first time in 28 months that no price growth was reported, showing a slowdown in the market with slightly more respondents reporting price falls than reporting increases.
In all, there are definite signs that the property market is slowing, but there is still sales potential out there with 1 in 3 moves being needs driven rather than discretionary.
