Is it Now or Never for...

In 2021/22, demand (people wanting and able to buy) was bigger than the supply of properties available to buy. Hence Rugeley house prices rose. Let us see what is happening now in Rugeley in 2023.

Looking at February’s sales numbers alone …

52 properties sold subject to contract (stc) in the Rugeley area in February.

(Compared to 53 properties sold (stc) in February 2022 and 90 sold (stc) in February 2021).

 (Rugeley being WS15).

Meanwhile, the number of properties coming onto the market (listed) in Rugeley has also changed.

69 properties came onto the market in the Rugeley area in February.

(Compared to 65 properties listed in February 2022 and 78 properties in February 2021).

Therefore, in February 2023, 1.33 homes came onto the market (listed) in Rugeley for every home sold (stc), compared to 1.23 homes per property sold (stc) in February 2022.

Interesting when compared with the national statistics. In February 2023, 1.48 homes came onto the market in the UK for every home sold (stc), compared to 1.11 homes per property sold in February 2022.

What does this all mean for house prices and for Rugeley people thinking of selling?

Well, we need to go back to last year first.

Roll the clock back to autumn 2022. Interest rates had been on the rise throughout the summer. These increased interest rates were starting to have a subtle dampening effect on the UK property market.

In the first six months of 2022, an average of 27,590 UK properties were sold per week. Two months before the Autumn Budget, that had eased to an average of 24,229 UK properties selling per week. Three months after the Autumn 2022 Budget, it slumped to an average of 16,821 UK sales per week.

The weekly average for February 2023 was 22,192 UK sales per week, the best since September 2022.

The effects of Liz Truss's Budget in September 2022 have waned. That budget triggered turmoil in the mortgage market as lenders withdrew funding and mortgage rates spiked. The availability (and pricing) of mortgages has improved lately, and mortgage rates have stabilised, albeit at higher rates, piling pressure on household budgets.

The housing market is driven in part by sentiment and confidence. Both took a beating in the autumn of last year, yet things appear to be easing in that department. In a nutshell, people are still determining how the Rugeley property market will go in 2023.

As you can see from the sales and homes coming on the market (listings) statistics at the start of this article, the demand for Rugeley homes is still at a decent level (very similar to pre-Covid levels seen in 2016 to 2019), whilst listings have increased (meaning a greater choice of Rugeley homes to buy).

So, this then comes to the issue of Rugeley house prices.

Rugeley house prices are falling.

There, I have said it. Of course, Rugeley house prices are falling. The house prices paid in the 'silly season' in late 2021/early 2022 are not paid today in March 2023. In 2021, it was a ‘bun fight’; the Rugeley property market was ‘on fire’, and people were outbidding each other to secure property. Now those times are over, so the prices being paid are much more reasonable.

Is that a house price crash? No, it's just a house price adjustment!

Rugeley house prices will continue to drift slowly and steadily downwards throughout 2023 as the effects of interest rates and affordability clip the wings of many buyers. This is good news because if Rugeley homebuyers (and sellers) don’t believe there will be large house price falls happening, it will make more people come onto the Rugeley property market in the spring and summer to buy and sell property. 

As I have said in recent articles on the Rugeley property market, the lower priced/smaller sized properties sell more than the middle priced/middle sized properties. This is because the smaller properties are more attractive as higher mortgage rates put a dampener on home buyers’ household budgets.

Also, the cost-of-living crush is making more mature homeowners downsize their mid-sized homes that are costly to heat. Interestingly, in a few locations around the UK, the upper quintile (top 20%) in terms of house prices are immune to all this downturn in demand. Very strange! 

Yet back to the question of Rugeley house prices.

The house price data that many journalists use to judge house prices are between six and nine months old. If a property has a sale agreed upon in, say, March, it will complete (completion is when the legal work is done, monies transferred, and keys handed over) in August or September and show on the Land Registry figures by November or December at the earliest (i.e. eight or nine months later).

Yet now, through Denton House Research, we have access to data on house prices that are a matter of a week old.

The listings are £/sq. ft shows what homeowners are putting their homes on the market at and the sales £/sq. ft what homes are selling for. By tracking data on the average price per square foot for both listings and sales agreed, we can track exactly what is happening to house prices in real-time. The data is currently at the regional level (more local data to follow soon), yet it shows what is happening today to house prices.

• In June 2020, the average £/sq. ft for every listing in the West Midlands region was £255.94 per square foot, and the average £/sq. ft for every sale regionally was £239.98 per square foot (the £/sq. ft on sales tends to be lower than the listings because smaller/cheaper homes have a higher propensity to sell than more expensive/larger homes).

• In August 2022, the average £/sq  ft for every listing in the West Midlands region had risen to £292.64 per square foot, and the average £/sq. ft for every sale regionally was £285.82 per square foot.

• In February 2023, the average £/sq. ft for every listing in the West Midlands region was £296.01 per square foot, and the average £/sq. ft for every sale regionally had drifted downwards to £277.34 per square foot.

So, what does this all mean?

House prices have dropped a few percentage points since the summer (not the 10% to 20% the doom mongers have quoted).

Also, the lowest point regarding house prices in all regions of the UK was January 2023, and the figures you see in these stats have a slight upturn in them in February 2023.

In the coming weeks, I will delve deeper into the statistics. We have to be aware of the gap between listing £/sq. ft and sale £/sq. ft. If this gap gets too big, sellers are getting too optimistic about pricing.

They will suffer as their home languishes on the market, become stale, and experience shows they will have to reduce their property to an asking price under what they would have achieved if they had priced it realistically from day one.

Will house prices continue to drop in Rugeley?

Yes, the February 2023 uplift in house prices will be a blip. Unless something seismic happens, Rugeley house prices will still be around 10% (+/- a few percentage points) lower at the end of 2023 than in the late summer of 2022.