- With the Bank of England raising
interest rates and inflation high, what is happening in the Neath property
market?
- Are properties selling in Neath? And
if so, what is selling?
- What will happen to the value of your Neath
home?
- Read the article to find out what is
happening to the Neath property market.
As we enter February, the Neath (and British) property market is
full of mixed messages.
Whilst the Bank of England increased the base rate nine times in
2022, meaning they are now at 3.5% (3% higher than 12 months ago), mortgage
rates are now dropping.
The Neath property market rocketed over the last few years because
of the imbalance of the number of properties for sale versus the demand, with
many more people looking to move home than there were properties available.
Now, as we are over the first month of 2023, we are
experiencing a steadier Neath housing market, where homebuyers have the time
and opportunity to ensure they find the right home for them.
The days of 50 viewers per property on the first weekend of
marketing, frenzied Neath buyers outbidding each other by increasing their offers
by tens of thousands of pounds over the asking price has become the exception
and not the norm.
I often get asked my thoughts on the Neath property
market (hence these blog articles), and at this time of year, I get asked my forecast for the year ahead.
The one big thing I have noticed is the imbalance of what is
coming on the market for sale versus what is selling.
For example, 38.2% of properties that came on the market nationally in November and December 2022 had an asking price of £250,000 or less, yet 45.6% of the properties sold subject to contract since 1st January 2023 have been £250,000 or less.
That doesn’t sound like a lot, yet it makes a massive
difference to the property market.
However, it’s very easy to look at national averages,
regional averages and, of course, Neath averages. Yet the property market is
just one market nationally, as there isn’t just one Neath property market.
However, the same pattern is seen in the
higher-priced Neath properties. These higher-priced properties are selling more
slowly than the lower-priced Neath properties. Therefore, the need for those
larger Neath properties to be more realistic in price is paramount to
stand out from the crowd, especially with the next point.
Evidence suggests there is a growth of Neath buyers, who are
looking to find a home before putting theirs onto the market. This was
unthinkable last year, yet as the Neath property market returns to normality,
this will be seen more and more.
What are my thoughts?
Firstly, the time scale of how long it will take to sell a Neath
home.
I expect to see the time it takes to sell a Neath home increase from 40 days in 2022 to a more ‘normal’ housing market of around 65 days.
Secondly, the imbalance of the Neath property market.
A greater number of larger homes in Neath are coming on the
market because (as mentioned recently in a previous blog post) of the higher
number of mature homeowners looking to downsize. This is
because these larger homes have become much more expensive to heat, and as many
of the occupants are on fixed incomes with their pensions, they are downsizing
to cut costs.
Thirdly, that brings me to talk about energy
efficiency.
Many buyers have started to ask about a property’s
Energy Performance Certificate (EPC) rating. I recommend to Neath homeowners
considering moving in the spring or summer to have an EPC done on their
property now, as there may be points that could easily be rectified and improved
from one EPC rating band to another.
This would mean you will get a lot more interest and
a better price for your property. If you need any help or guidance in
organising an EPC on your Neath property (even if you are not selling for
six/twelve months), do not hesitate to me give me a call.
So, what is happening in the Neath property market
in terms of new properties (aka new listings) and what is selling?
49 properties have sold (STC) in the Neath area since 1st January 2023.
(Neath being SA10/11).
However, it’s essential to look at what is selling
in Neath, and the most active price range is the £100k to £150k range, where 23
properties have been sold subject to contract (representing 46.9% of sales).
Looking at what is coming onto the market in the
same time frame …
73 properties have come
onto the market in the Neath area since 1st January 2023.
Yet the price range with the most listings is the £150k to
£200k range. Again, this backs up the idea that the lower to middle of the Neath
property market is where the sales are, but the properties coming onto the
market are slightly higher in price.
This means those Neath homeowners with properties in those
middle to upper price ranges need to be ‘on point’ to stand out from the crowd
regarding their marketing, be spot on regarding their pricing (compared to the
growing competition of other larger homes for sale) and now more than ever,
their EPC rating (especially if they are on the cusp between two EPC bands).
Before I conclude, you might wonder why I have not mentioned
Neath house prices.
Well, what will happen to Neath house prices in 2023 is something I am not sure of.
(Yes, I know that level of frankness is strange coming from
an estate/letting agent).
I know the prices being achieved for homes in Neath in the spring
of 2022 (when everyone was out bidding each other) are not being achieved
today. It all depends how you look at it.
Are Neath house prices dropping or are they just returning
to normal? I would say the latter.
However, looking at house prices as a ‘bellwether’ for the
health of the Neath property market has flaws.
Many economists and property market commentators believe
transaction numbers (the number of properties sold) give a more accurate and
truthful indicator of the property market’s health than just house values
alone.
The reason is three-fold.
Firstly, most people also buy a home when they sell their
own, so if Neath property values drop by 10% or rise by 10% on the one you are
selling, it will do the same on the one you are buying – meaning to judge the
health of a property market on house prices is very one dimensional.
Secondly, as most people move up market when they do move
home, if the price of the one they’re selling might not be as much as they
would’ve achieved in 2022 (if they drop), the price that they will pay on the
one they want to buy will be lower. Thus, it will cost them less to move
upmarket!
E.g. Last year, your Neath home was worth £400,000, and
the one you wanted to buy would have been £750,000. Let’s say Neath house
prices did drop 10% in 2023 (which I don’t know if they will); your home would
be only worth £360,000. Yet the one you want to buy would now be worth
£675,000. So last year, it would have cost £350k to move, but if Neath house
prices drop 10%, the move would cost £315k, saving you £35,000.
Third and finally, moving home is a human thing. Property
habitually delivers a robust emotional connection with homeowners – a
connection that few would attribute to their other investments like their stock
market investments or building society savings passbook.
Moving home could be described as a human journey, moving
from one chapter of one’s life to another.
Therefore, when people do move home, it shows they are
moving forward in their lives, which gives a great indicator of the property
market’s health.
It’s going to be an interesting year for the 2023 Neath property market.
My opinion. Do what is suitable for you, your family and
your finances.
Ignore the newspapers and look at the facts in hand and if
you want a frank chat about the Neath property market, irrespective of whether
you want to sell or not, call me. I might not tell you what you want to hear,
but I will tell you what you need to hear.
