Second-stepper home sellers are the most likely to find a buyer before Christmas, according to the latest House Price Index from Rightmove.
The property portal reports that the average price of property coming onto the market was up by 1.1% (£3,432) on a monthly basis in October to stand at £313,435.
The Rightmove index has recorded an increase in October every year since it started back in 2001, but this month’s is the largest since the 1.4% rise recorded in 2014. However, with more sellers chasing fewer buyers, this month’s 104,000 new-to-market sellers will have to work harder to find a buyer before Christmas.
The Director and Housing Market Analyst at Rightmove, Miles Shipside, says: “With Christmas some 69 days away and the average time to find a buyer being 63 days, many of the 104,000 new sellers this month will be hoping to agree a sale before Christmas. It will be harder for this autumn’s sellers to secure a sale, because buyers have more choice, with a 3.1% increase in new seller numbers compared to this time a year ago.
“In addition, the number of sales agreed was running ahead of 2016 over the summer, but has now fallen back, with a 5.9% decrease compared to last September. New sellers’ pricing optimism may therefore be unfounded in some parts of the country. While this month sees higher asking prices in eight out of ten regions, sales agreed are below this time a year ago in nine out of ten. With buyers becoming more Scrooge-like with their cash, sellers who have undercut the average 1.1% rise in asking prices may stand a better chance of finding a buyer before Christmas, especially if they are in one of the more active parts of the market.”
The average time from first advertising on Rightmove to being marked as sale agreed by an estate agent was 63 days this month. However, national averages mask many regional and sector variations. The properties that are moving the quickest are in the second-stepper sector – those with three or four bedrooms – except four bedroom detached homes, where the average time taken to find a buyer is 60 days.
Second-Stepper Sellers Most Likely to Find Buyers Before Christmas, Reports Rightmove
Typical first time buyer properties – those with two bedrooms or fewer – also just undercut the average, at 62 days.
Shipside observes: “Whilst affordability is stretched, it is still countered by the motivation to own a home rather than rent, or the need for extra space to house a growing family. Sellers looking to find a buyer before Christmas have a head start if they are selling a property in these two mass-market sectors, as that is where there is the greatest demand.
“However, with buyers’ average wage rises often falling behind retail price inflation, and with a rise in interest rates being more heavily trailed by the Bank of England, sellers in these most popular sectors should still be wary of over-pricing. Buyers will be looking for the best buy on the market in their desired area, either in terms of price or quality of finish.”
The toughest market at present is the sector made up of properties with five bedrooms or more, with this top-of-the-ladder category taking a current average marketing time of 76 days.
The challenge to sell these larger properties is particularly noticeable in London, where the average time to sell is now 86 days. This longer period is having an effect on overall market activity in the capital, with the number of sales agreed down by 9% on the same period last year – more than any other region.
It’s regions in the southern half of the country that are dipping most, with an average of 7.9% fewer sales being agreed than this time last year, while the northern half performs somewhat better, with a fall of just 3%.
For the year as a whole, however, 2017 still remains ahead of 2016 on sales agreed numbers, with the year to date being 1.1% ahead of the previous year.
Shipside concludes: “Sales agreed numbers are holding up better in the north, whilst a common factor throughout the country is the lower and middle market sectors being the most active. However, where property prices have far outstripped buyers’ wages, and consequently their affordability, sellers will either have to be more tempting with their asking prices or outscore other properties with extra desirable features.
“With the number of sales agreed for the year still up on a pretty busy 2016, it shows there is plenty of potential life in the market and need for housing, but at the right price and quality. Get that right and it will hopefully mean the present of a successful sale for Christmas and the gift of a new home in the New Year. Those homeowners who need to do some work to their home to make it more attractive to potential buyers should get ready now in time for marketing in January.”
The Chairman of estate agent Jackson-Stops, Nick Leeming, offers his thoughts on the index: “The driving force behind the slowdown in sales in September is the combination of a lack of supply of homes to the market and potential buyers being warier than usual, due to the prospect of increasing interest rates. Christmas is generally a crucial deadline for everyone involved in the house buying and selling process, with buyers wanting to unwrap gifts with their family in their new property. Accurate pricing is vital to secure a sale as quickly as possible, particularly as buyers are savvier than ever before on their local property market, given the host of research tools at their disposal. Buyers will generally have a clear check-list of what they want in a home and they will not pay over the odds in the current climate for something that does not tick all the boxes.”
Kevin Shaw, the National Sales Director at Leaders estate agent, also responds: “The market varies significantly from region to region, but certainly in the south it is now more price sensitive, whereas in some areas of the Midlands, we are still seeing demand outweigh supply and high asking prices being achieved. Whatever the market conditions, it is always important to set the right price as soon as a property comes onto the market. This is even more crucial if you want to achieve a sale within a specific timeframe. Although the market is now slightly quieter as we continue into October, it certainly is possible to secure a buyer by Christmas.”
The Managing Director of Andrews estate agent, Chris Chapman, comments on market conditions: “We’re seeing similar lead times as Rightmove to secure a buyer, and we are working with our vendors already who are looking to move in the New Year to get their properties listed now to get a buyer settled in time for Christmas. The key with the current market is correctly priced property, which is all about using an experienced agent. We are seeing more and more regional differences in the property market, so selecting an agent with detailed knowledge of your area is key to success.”
Finally, the Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, says: “The north-south divide is no new division where UK house prices are concerned, but a slower market climate in recent times has seen the divide almost reversed, with the more affordable areas in the north performing much better where actual price growth is concerned. Of course, it goes without saying that those with a top-of-the-ladder property will find it harder to sell, as these properties take a bit more time whatever the market conditions.
“With the UK market showing positive signs of a recovery over the last few months, it is unlikely the average UK seller will struggle as we approach one of the busiest periods in the UK property market calendar. I certainly don’t think there are more sellers chasing fewer buyers, as the level of housing stock, or lack thereof, continues to be the driving factor behind UK price growth. There are many pockets of the UK outside of the top-end market in London and the South East that are still seeing an imbalance between the level of buyer demand to houses available.”