3.2% price fall over last two months tempts bargain-hunting buyers
- The price of property coming to market drops by 1.5% (-£4,496) this month with new seller asking prices now on average nearly £10,000 lower than in October
- This is the biggest fall over two consecutive months since 2012, as sellers try to attract buyers despite a combination of the usual Christmas slowdown, stretched affordability and political uncertainty
- Some signs of cheaper prices tempting buyers in search of a bargain, as number of sales agreed is only down by 2.1% compared to same period a year ago in spite of market headwinds
- With Rightmove traffic usually tripling between Christmas Day and the New Year, would-be sellers will maximise their exposure if they come to market as soon as possible
The price of property coming to market drops by 1.5% (-£4,496) this month. This second consecutive monthly fall has resulted in average new seller asking prices now being 3.2% (-£9,719) lower than two months ago, a decrease of nearly £10,000, as sellers try to tempt prospective buyers. This is the biggest fall over two consecutive months since 2012, when asking prices dropped by £11,836 over the same period. There are some signs that these cheaper prices are tempting buyers back into the market, with the number of sales agreed proving surprisingly resilient.
Miles Shipside, Rightmove director and housing market analyst comments: “It’s usual for new-to-the-market sellers to price lower in the run-up to Christmas to tempt distracted buyers, so we should not read too much into the mere fact of two consecutive monthly falls. However, these falls have been larger than usual, making this the largest fall over two months for six years, showing that there are more than just seasonal forces at play. With stretched affordability limiting some people’s ability to buy for the first time or trade up, a modest lowering of property prices combined with an increase in wage growth could help more of them to move and thus increase transaction numbers.”
As well as the usual Christmas slowdown, would-be sellers are also faced with downwards price pressure from stretched buyer affordability and political uncertainty. The three regions where property prices went up most since 2012 are now seeing year-on-year price falls. London (-1.1%), the South East (-0.9%) and the East of England (-0.7%) are all seeing cheaper new seller asking prices than a year ago. The drag of London and its commuter-belt regions keeps the national average annual rate of increase at +0.7% as 2018 comes to an end, despite some significant increases in northern regions.
Shipside observes: “Rightmove’s forecast for 2018 was that prices would rise by a subdued 1% as lacklustre wage growth and tighter lending criteria could no longer support rising prices in some regions. However, the northern regions are keeping the national figure in positive territory as 2018 draws to a close. Wales leads the UK’s annual growth with +6.2%, while the East Midlands, West Midlands and Yorkshire & the Humber are all between +4% and +5%. We forecast that 2019 will see a similar pattern with the north still broadly out-performing the south, though our prediction for the year ahead is slightly more muted with the overall national average flat at 0%.”
There are however some signs of cheaper prices tempting buyers searching for a bargain, as the number of sales agreed by estate agents is only down by a relatively marginal 2.1% compared to the same period a year ago despite the market headwinds. There are still buyers in the market for the right property at the right price.
Shipside says:“The run-up to Christmas can be one of the best times for buyers to negotiate a better deal, as they are fewer in number so sellers who are keen to sell have to talk turkey on accepting a lower price. The window of maximum buyer negotiating opportunity starts to close from Boxing Day onwards, as more buyers become active in the market. From the low point on Christmas Day, the number of pages of property viewed on Rightmove last year more than tripled (+228%) by the first working day of the New Year. Home owners who are thinking of coming to the market early in 2019 should seriously consider doing so as soon as possible to get maximum exposure to the surge in interest from buyers who make it their resolution to move in the New Year.”
Agents’ views
Peter Woodthorpe, Director of Readings in Leicester, said: “Overall our sales have been up this year compared to 2017 and prices have been growing steadily. The lack of stock for sale in our area has led to some over ambitious pricing which is the reason why some properties might be sticking, and it’s why pricing correctly from the start is so critical. There’s definitely one or two bargains to be had as is usual at this time of year. As prices are still relatively affordable for home-owners and the market is still fundamentally sound in our area, there’s no reason why the market will not continue to perform well next year.”
Nick Leeming, Chairman of Jackson-Stops, comments: “The 2019 property market is likely to get off to quite a slow start in the New Year while the UK awaits clarity on Brexit negotiations. However, despite the market not being as buoyant as it was a few years ago, accurately priced homes will still sell so it is interesting to see signs of vendors starting to recognise this in Rightmove’s latest data. Over the last year there has generally been a mismatch between vendor expectations and the price that buyers are prepared to pay, particularly at the top end of the market, so properties launching now at a competitive value will stand out and attract buyers’ interest. In my experience the first working day after the New Year break is one of the busiest days for property portals, so for those looking for their home to be front and centre of the property parade this is a crucial time for marketing.”
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