Property Sales in Devon More Active Amid National Slump

30/04/2024
(Last Updated: 02/05/2024)
31
9 min read

Average Sale Price

£323,102
(February)

Price Growth

-0.4%
(YoY to February)

Best Growth YoY

South Hams & East Devon
(+7.9% & +6.7%)

Least Growth YoY

Torridge & North Devon
(-8.1 & -6.6%)
Key Takeaways
  • Devon fares better than the rest of the country in worst December ever for volume of property sales.
  • House prices in Devon are falling, while new house prices are soaring.
  • Plymouth is the most affordable place to buy a home in the South West.



An arial photo of Exeter in Devon, SAM Conveyancing's property market report for the region of Devon


Worst December on record for property sales in Devon

Devon saw just 530 property sales across the whole of the region. While property transactions typically slow down for Christmas, sales volume has only ever fallen below this amount twice; once, in January and February 2009, following the economic crash, and again, in April and May 2020, when markets were stalled by the pandemic.

The first quarter of 2024 saw an uptick in activity; however, this has again slowed, as interest rates remain high despite falling inflation. Mortgage lenders may have been too quick to drop their interest rates in January, anticipating a fall which is yet to come, so rates have come up again, and many would be buyers are waiting in the hopes they can secure a better deal, later in the year.


Source: House Price Index (HPI)


House prices in Devon fall annually for fourth month in a row

Every month from November 2023 to February 2024 saw the average house price in Devon fall versus the same month last year. This matches national trends and is due to the weaker buying power of the population through the cost of living squeeze, high inflation and prohibitive borrowing costs.



Source: House Price Index (HPI)


How does the Bank of England affect the Devon Housing Market?

House prices tend to rise with inflation (2021) but fall when the base rate comes up (2023); the higher cost of borrowing means buyers have less to spend. The base rate has held steady at 5.25% since August.


Source: Office for National Statistics (ONS)


The base rate is expected to come down slightly in the summer but may be later than anticipated. The high cost of borrowing keeps pressure on the mini-housing bubble, as would-be homeowners stack up, waiting to buy at a more favourable time. This suppresses house price growth. When the base rate drops and pressures ease, a mini flood to the market will get house prices growing again.


Will there be a UK recession in 2024?

The UK Economy fell into recession last year, but positive annual growth of 0.25% was initially forecast by the Bank of England at the beginning of 2024.

The British Chamber of Commerce (BCC) revised their forecasts upwards at the end of February, to 0.5% for 2024, 0.7% for 2025, and a healthier 1% growth for 2026.

This, however, is well below the pre-pandemic average. NEISR estimate that Britain's poorest households will not recover fully until 2027.



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What are homebuyers looking for?

Devon property market more active than the rest of the country

December might have been the worst on record for sales volume in Devon, but the county fared relatively well, at 47% of the previous year's transactions for the same month, way ahead of England & Wales which was down at 39% versus last year.

West Devon Wins

Sales volume in West Devon performed better than any district in the region and the country as a whole. The area saw 60% of last year's transactions which was a lively market, under the circumstances. It is closely followed by North Devon which saw 59% of last year's sales.

Torridge had the quietest month for sales volume but still came in just ahead of the national average, at 40%.


Source: House Price Index (HPI)


South Hams is the most expensive place to buy a home in Devon

The average price of a home in South Hams is now a whopping £413,654, which is £127,318 more than the cheapest area, North Devon, at £286,336.


Source: House Price Index (HPI)


Winners and Losers in the Devonshire property market

South Hams and East Devon are on an overall upward trajectory since the dip of last spring. West Devon has been fairly volatile but is now just a couple of thousand pounds behind its record high in September 2022.


Source: House Price Index (HPI)


Exeter, North Devon and Torridge have been falling, and Mid Devon and Teignbridge have remained most stable, although they've not yet recovered to their respective 2022 peaks.


Source: House Price Index (HPI)


New houses in Devon drive up average price

This trend is more pronounced in certain regions than others but the overall pattern is obvious. Since the house price peak of 2022, average existing house prices in Devon fell through the spring and then stayed fairly steady over the past year.

New builds in Devon apparently missed the memo, and their prices have continued climbing at the steepest trajectory we have ever seen.

"This disparity in price will fuel nearby house prices up as estate agents use these potentially over-priced local comparables when setting sale prices for existing properties in the local area." - Andrew Boast

This could mean new build developments in your immediate location will inflate the value of your home. Great news if you're already a homeowner; bad news if you're a first-time buyer.


Source: House Price Index (HPI)


What is next for the Devon property market?

Devon County Council is working on a range of infrastructure projects, with partners, to support the growth and resilience of the economy. Infrastructure improvements support housing market growth through better economic prospects for residents, more capacity for building new homes, and improved energy, accessibility, transport and leisure.

Should I buy a house in Devon?

Devon is an excellent location to choose to live:

    If you can afford to buy in Devon now, it is likely you'll be able to switch to a more affordable mortgage rate in a couple of years, by which point your investment will hopefully have appreciated in value.

    If you are renting and can afford to buy at the current rate of interest, this may be a much more desirable option than saving for a bigger deposit, as rents are set to rise nationally this year by 5% or more (but only 2% in London), whereas mortgage rates are likely to fall.

    However, if you are stretching your budget to buy in the area, consider a cheaper location, or saving for a bit longer. We may not be out of the woods yet, and if the base rate (and mortgage rates) rise, you may not be able to keep up with your monthly repayments. Worse yet, if prices do fall, you could end up in negative equity. Buying a home with a mortgage always comes with risks.

    If you are ready to buy a house in Devon or the surrounding area, we can handle your purchase with a dedicated SAM Conveyancing Consultant to manage your transaction alongside one of our hand-selected panel solicitors.


    Get a Quote




    "Spring will show an increase in sales volume that is more in line with 2022 than the stagnant 2023, offering opportunities for home buyers and homeowners alike. With more affordable mortgage products and the reduction in the cost of living, the housing market can take a breath after a very exhausting 18 months. "

    "While the Bank of England states that a base rate fall is "way off" at the moment, this message is meant to calm mortgage providers and the markets so they can plan further ahead through May and June. The delay will help reduce inflation closer to the target of 2% and ensure a longer term of stability through the rest of 2024 and 2025."

    "The major curve ball to this is the General Election and what would happen if there was a changing of the guard."

    - Andrew Boast FMAAT MIC
    CEO and Author | SAM Conveyancing

    Sources: Latest data from - Gov.UK, Bank of England, UK House Price Index.

    Caragh Bailey, Digital Marketing Manager
    Written by:

    Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

    Andrew Boast of Sam Conveyancing
    Reviewed by:
    Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
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