More properties listed than at any time in the past eight years

Welcome to the Macro Overview for week ending 30th June:

As always I dive into the current state of the UK property market and macroeconomic metrics.

Key Highlights:

• Property Market Stats:
  • Prices on sales agreed remained at £350/sq ft (+3.2% this quarter).
  • Listings stayed 5.4% higher than the pre-pandemic market for the year to date.
  • Net sales were 13.5% better than the same week in 2023, 4.8% higher than the 17/19 average, and 11.3% above the 2023 year-to-date.

The market shows resilience with more properties listed than at any time in the past eight years, reflecting a robust supply pipeline. This influx of properties may influence pricing and negotiation dynamics as buyers have more options to choose from, potentially balancing the market. Credit to Christopher Watkin for providing the market stats

• Q1 Macro:
  • The ONS revised Q1 2024 growth figures from 0.6% to 0.7%.
  • Household spending increased, despite the savings ratio rising to 11.1%.
  • Real Household Disposable Income grew by 0.7% in Q1 2024.

These revisions indicate a stronger economic footing than initially thought, with increased consumer spending suggesting confidence in economic stability. The rise in the savings ratio, however, shows that households remain cautious, possibly preparing for future uncertainties.

• Industrial and Retail Insights for June:
  • CBI Industrial Trends reports showed a modest increase in output.
  • Distributive Trades saw a decline in retail sales from +8 in May to -24 in June.

The industrial sector’s steady performance contrasts sharply with the retail sector’s struggles. This divergence underscores the varying impacts of economic conditions across different sectors. Retailers are grappling with reduced consumer spending, possibly due to inflation and high living costs.

• Interest Rates and Yields:
  • 5-year gilt yield closed at 4.025%, rising throughout the week.
  • Market activity was influenced by US news and Federal Reserve commentary.

The rise in gilt yields reflects market adjustments to revised growth figures and ongoing inflation concerns. The Federal Reserve’s commentary can often ripple through global markets, affecting investor sentiment and financial strategies.

Looking Ahead: Next week, we’ll look at the house price indices, final PMIs for June, and the Bank of England money and credit report. These metrics will provide a clearer picture of the market’s direction and the broader economic environment.

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