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Highlights:
- Nearly 300 estate agents went bust over the past year, reflecting a 32% rise in insolvencies.
- House sales dropped by 12% in the year to June, reaching a decade-low of 861,210.
- Recent data shows house prices increasing by 0.7% from August to September, the fastest growth in two years.
The UK’s housing market continues to face challenging conditions, with nearly 300 estate agency firms going bust in the past year. According to data from the Insolvency Service, 286 estate agents ceased trading in the 12 months leading up to July, marking a 32% increase from the previous year. The surge in insolvencies coincided with a sharp drop in house sales, which fell by 12% to 861,210 in the year to June, the lowest level in a decade, according to HMRC figures.
The rise in interest rates has been a key factor in the sector's struggles, with the Bank of England’s base rate reaching 5.25% before being cut last month. The elevated borrowing costs, the highest in 15 years, have put significant pressure on both the housing market and estate agents' incomes.
The current market downturn has been traced back to the fallout from Liz Truss' mini-budget in late 2022, which saw mortgage rates rise and approvals drop significantly. However, recent data suggests that some recovery may be on the horizon. Nationwide reported that house prices increased by 0.7% between August and September, the fastest monthly growth in two years. On an annual basis, prices climbed by 3.2%, reaching an average of £266,094.
Nationwide’s chief economist, Robert Gardner, highlighted that the recent price increases were driven by income growth outpacing house price rises, as banks continue to lower mortgage rates to attract potential buyers.
