Second-stepper sellers most likely to find a buyer before Christmas as prices jump 1.1%
- 1% (+£3,432) rise in average asking prices of 104,000 newly marketed properties compared to previous month
- New sellers ask higher prices in eight out of ten regions despite sales agreed numbers being down in nine of the ten this month compared to September 2016
- Average time to find a buyer is 63 days, so with Christmas 69 days away which sellers have the best odds of festive cheer?
- Most likely to sell are second-stepper properties, with average time to find a buyer of 60 days, followed by first-time-buyer type properties at 62 days
- Top of the ladder properties take 76 days on average so less likely to sell before Christmas
- Northern sellers more likely to find a buyer with sales agreed numbers down by a modest 3.0% on September 2016, compared to the South where sales are faring worse, down by 7.9%
- In spite of a more challenging environment, sales agreed numbers year-to-date are still 1.1% ahead of 2016
Overview
The price of property coming to market is up by an average of 1.1% (+£3,432) on the previous month. 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 seen 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.
Miles Shipside, Rightmove director and housing market analyst comments: “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 is 63 days. However, national averages mask many regional and sector variations. The properties that are moving the quickest are in the second stepper property sector, those with three or four bedrooms except four bedroom detached, where the average time taken to find a buyer is 60 days. Typical first-time-buyer type properties, with two bedrooms or fewer, also just undercut the average with time to sell being 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 four bedrooms detached, with this “top of the ladder” category taking a current average marketing time of 76 days. The extra challenge to sell these larger properties is especially noticeable in London, where the average time to find a buyer is now 86 days in this sector. This longer time to sell London’s upper-end properties is having an effect on overall market activity in London with the number of sales agreed compared to the same period a year ago being down by 9.0%, more than any other region. It is regions in the southern half of the country that are dipping most with an average of 7.9% lower sales being agreed than this time a year ago, whilst the northern half performs somewhat better with a fall of only 3.0%. 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.”
Agents’ Views
Nick Leeming, Chairman at Jackson-Stops, said: “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, national sales director at Leaders Estate Agents: “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.”
Chris Chapman, Managing Director at Andrews Estate Agents, said: “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.”
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