Muted rise in prices but market moving with 5% uplift in home-hunting
First data-driven indicators of the year show home-movers remain active:
- Price of property coming to market rises by 0.4% (+£1,207) this month, the lowest monthly rise at this time of year since January 2012
- National average dragged down by new-to-the-market sellers realising they have less pricing power than usual given the current market backdrop, especially in the south
- Visits to Rightmove up 5% in first two weeks compared to a year ago*, to an average of over 4.5 million visits each day, indicating potential home-movers still searching in vast numbers
- Number of properties coming to market in the first two weeks in 2019 broadly the same as a year ago (-2.1%)*, with owners in more northerly regions showing greatest propensity to move
The first data-driven market snapshot of 2019 based on virtually the whole market shows a patchy but active start to the year, with more northerly regions faring better in terms of pricing power and willingness to move than those farther south. The average price of property coming to market is up by just 0.4% (+£1,207) for January, the lowest monthly rise seen at this time of year since January 2012. In contrast, potential home-mover visits to the Rightmove website are at record highs for the first two weeks of a new year, and up by 5% on the comparable period a year ago.
Miles Shipside, Rightmove director and housing market analyst comments: “As we move from the old year into the new, the headline summary is that the Christmas slowdown came early and the hangover lasted a few days longer into the New Year than usual. Agents report that activity is now picking up, though when you dig underneath the national averages, the first snapshot of 2019 shows a somewhat patchy and variable picture depending on where you are in the country. Given the current market backdrop and ongoing political turmoil, it’s not surprising that the more challenging conditions in London and its nearby regions mean that they appear to have had a slower start to the year. Overall however, with Rightmove visits up by 5% on 2018 and at record levels for this time of year, it is encouraging that potential home-movers are still searching in vast numbers. Traditionally this is the time of year when more movers look at a wider choice of fresh property supply and kick-start the market, and this year’s buyers have the added spur of the slowest rate of new year price increases for five years.”
Three out of eleven regions have seen actual price falls this month. London, which perhaps is feeling more closely affected by the uncertainty associated with Brexit, has seen an average fall of 1.5% in new seller asking prices this month, while the adjacent South East region remains muted at only +0.2%. Both London and the South East have a strong influence on national average prices since together they constitute 30% of all new-to-the-market listings, despite their homeowners currently being among the most reluctant to come to market. The national average of properties coming to the market is broadly the same in the first two weeks of the year (-2.1%) compared to the same period a year ago. There is a 10.0% drop in London, while the largest rises are predominantly in the northern regions.
Shipside adds: “Broadly speaking, buyer affordability and sentiment are in more positive territory in the north than in the south. But wherever you are looking to buy, mortgage rates are still at historically very cheap levels and lenders are competing hard to lend. In addition, sellers seem to recognise that they need to lower their price aspirations, and with an average of over 4.5 million visits to Rightmove each day many people appear to be contemplating a new-year move. Mass-market home-movers have a track record of ignoring the politics and continuing to satisfy their housing needs, and as long as these fundamentals remain in place through this period of uncertainty, the market will keep moving. Indeed, in 2018 the number of sales agreed by estate agents was down by only 3% on 2017, an indicator of resilience and holding up much better than many had forecast.”
David Plumtree, Connells Group Estate Agency Chief Executive, says: “2019 has started off in encouraging fashion in respect of market appraisals and instructions, both of which are ahead of the first two weeks of last year. As expected, we continue to see a shortage of buyers despite having more available stock, and this is more pronounced in London and the East. Brexit concerns are, of course, the cause for hesitancy amongst buyers and we don’t expect any change in this until we see some certainty. There remains a good deal of price reduction activity on unsold stock in order to stimulate interest from buyers and we expect to see very modest growth in average house prices in 2019.”
Will Watson, Director of Watsons Residential in Nottinghamshire, says: “It’s been quite an interesting start to the year. The first week of January was really slow. We had half the amount of viewings booked in that we were expecting, but during week two we’ve seen things gradually start to pick up. We had nine or ten sales last week and about the same in new listings. The market seems to be relatively healthy for first time buyers, at least up to the £200,000 mark. Anywhere past £250,000 and it’s getting more challenging, with lower activity. I think with Brexit, there will continue to be caution and uncertainty in the market until we get an outcome either way. Once we know where we stand it should start to alleviate that caution and stimulate growth in the upper end of the market.”