The Bath property market has experienced a rollercoaster ride since 2019. There have been unprecedented challenges and opportunities that have shaped the landscape of homebuying, selling, and renting in the area. By examining this 6-figure time frame, we can better understand the resilience of the local property market and how economic factors, particularly interest rates, influence property transactions. The Graph below indicates vividly the dramatic fluctuations during this time period.
THE PANDEMIC IMPACT AND POST-LOCKDOWN SURGE:
The first significant highlight in the graph is the pandemic and the lockdown in early 2020. The property market in Bath, like much of the country, ground to a near halt. House sales in April of that year alone plummeted by 89.1% below the 2019-2024 average. Effectively, the lockdown froze the market. Restrictions that were put in place made it extremely difficult for people to view properties, secure mortgages and move home.
However, the Bath property market experienced a remarkable rebound once measures introduced in the lockdown were eased. The graph indicates that there was indeed a ‘boom’ post-lockdown. Sales soared in some months to 57% above the 6-year average by mid/late 2020. This surge can be attributed to pent-up demand, government incentives such as the stamp-duty holiday, and a renewed appreciation for homeownership as people sought more space and comfort after such uncertainty. There was extraordinary activity during this period, and many homes sold very quickly and often well above the average asking price.
THE TRUSS MINI-BUDGET AND RISING INTEREST RATES:
The Bath property market remained buoyant through 2021. However, sales began to normalise in the latter months, fluctuating but still frequently staying above the long-term average. The shift in dynamics started in mid/late 2022 and coincided with the economic upheaval triggered by the ‘mini-budget’. The budget, which led to market instability and rising mortgage rates, immediately impacted buyer confidence. As a result, Bath’s house sales dipped below the long-term average as potential buyers paused to reassess their financial positions.
Simultaneously, the Bank of England (BoE) responded to inflationary pressures by increasing the base rate, as depicted in the graph above. The sharp rise in interest rates through 2022 and 2023, peaking around 5.25% in 2023, further damped the market. Higher mortgage rates reduced the affordability of home ownership, particularly for first-time buyers and made it more challenging for homeowners to move up the property ladder. The market cooled significantly, as seen in the negative sales percentages during this period.
RESILIENCE AND RECOVERY IN 2024 IN THE BATH PROPERTY MARKET:
Despite the headwinds of higher interest rates, the Bath property market in 2024 shows signs of resilience. The graph illustrates that even with these challenges, monthly sales have stabilised over recent months and are still above the long-term average. A testament to the underlying strength of the local market. It’s important to note that this average included the exceptionally high sales volumes of 2020/21, making the current performance even more impressive.
IN-DEPTH ANNUAL DATA FOR BATH:
Looking at the data for Bath estate agents in the BA1/2 area, we can see that:
- 2019 – An average of 180 properties were sold subject to contract (STC) per month in Bath, 11.2% lower than the 6-year average of 203 properties.
- 2020 – An average of 207 properties sold STC/month, 2.2% higher than average.
- 2021 – An average of 234 properties sold STC/month, 15.7% higher than average.
- 2022 – An average of 198 properties sold STC/month, 2% lower than average.
- 2023 – An average of 183 properties sold STC/month, 9.9% lower than average.
- 2024 YTD – An average of 218 properties sold STC/month, 7.8% above average.
This sustained level of activity suggests that demand for homes in Bath remains robust, driven by factors such as the area’s appeal, the relative affordability compared to renting. Perhaps the normalization of the work-from-home culture allows more flexibility in where people choose to live.
Furthermore, Bath sellers and buyers who have become adjusted to the new interest rate environment continue to move forward with their future plans.
LOOKING AHEAD: A MARKET OF OPPORTUNITY:
As we move deeper into 2024, the Bath property market presents opportunities for buyers and sellers. For sellers, the current conditions indicate that, despite higher interest rates, there is still strong demand for well-priced properties. On the other hand, buyers may find that the stabilising market offers a window of opportunity to secure a home before any potential further economic challenges.
If you’re considering moving in the next 6-12 months, now might be the perfect time to explore your options. Whether you’re looking to downsize, find more space or just want a change in surroundings, I invite you to get in touch with us for a free valuation & market appraisal of your home in Bath. Understanding the value of your home in Bath home in the current market is the first step to making informed decisions. With over 15 years of experience, our team is full of knowledge of the local area and is here to help you make the best-informed decision possible for your future. Despite recent fluctuations in the market, there are still plenty of opportunities to capitalise on.
