uk property market

Research by property purchasing specialist, HBB Solutions, reveals that properties which are slow to sell command an average price of up to -17% below England’s overall average house price with the biggest slow-seller markets found in London and the South East.

Despite England’s housing market running red hot since 2020, some homes are still lingering on the market for a long time, struggling to attract quality buyers. Upon analysing all homes that have remained on the market for more than 14 months, HBB Solutions’ research reveals that there are 9,263 slow-selling homes in England, the largest proportion of which are located in London where 2,643 slow-selling homes account for 29% of the national total.

The South East is home to 24% of England’s slow-selling homes with a total of 2,207 while in the East of England, 1,061 slow-sellers account for 11% of the national total.

In the North West, 862 slow-sellers account for 9% of the total, and the local city of Liverpool is home to 164.

In the South West, 686 slow-selling homes make up 7% of England’s total, with 58 of them located in the local city of Bristol.

Meanwhile, the West Midlands is home to 548 slow-sellers – 6% of the national total – 52 of which are located in Nottingham.

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What causes a home to be slow to sell?

There are a number of reasons that might cause a property to be slow to sell. If a home is in a dilapidated condition or simply poorly presented, buyers can be quickly turned off.

The old cliche of location, location, location also has a part to play. Even when a housing market is booming, it doesn’t mean that high buyer demand is universal for the whole country. There will always be some markets where demand is low and where perfectly good homes that would be snapped up elsewhere stagnate for more than a year.

Another common issue is overpricing. When sellers, often advised by their estate agents, market a house at an unrealistically high price, it can work to minimise buyer interest and often result in the need for a price reduction.

In fact, HBB’s research suggests that vendors with slow-selling homes will often reduce the price in the hope of finally attracting a buyer. As such, on average, homes that have been on the market for more than 14 months have a value -4.4% below England’s overall average house price, selling for £291,361 instead of £304,867.

Slow-selling homes suffer the most significant price reductions in the East Midlands (-7.1%), West Midlands (-7.0%), Yorkshire & Humber (-4.3%), East of England (-4.2%), and London (-3.9%).

On a city level, the biggest reductions are found in Liverpool (-17.3%), Sheffield (-17.2%), Bradford (-16.9%), Leeds (-16.2%), and Newcastle (-14.7%)

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Managing Director of HBB Solutions, Chris Hodgkinson, commented: “There have been moments in modern history where market and wider economic circumstances meant that demand for homes hit a worrisome slump resulting in many properties falling into the slow selling category. But today is not one of those times. In fact, it’s the complete opposite.

“Demand is through the roof with buyers competing with each other for, it sometimes seems, whatever they can find on the market, often resulting in offers stretching well above the original asking price.

“In such a hot market, it’s more likely than not that there is a good reason for a home being slow to sell. Its condition might be poor, its location undesirable, or even its price too high. And sellers can try and remedy all of these issues before trying again on the open market. However, improving the state of a home takes time and money, there is nothing that can be done to change the location, and even the simple act of reducing the price can be tricky because buyers may start to eye the property with suspicion – what must be wrong with it for them to resort to accepting less money?

“That’s why, sometimes, if you’ve been stuck on the market for months on end with no signs of hope, your best option is to consider alternative routes to selling. Through homebuying specialists like HBB Solutions, you can be sure to get a fair price for your home and feel confident that the transaction will be completed very quickly indeed.”

By Brandon Russell

Source: IFA Magazine

Residential transactions in July 2022 totalled 110,970, 32.9% higher than July last year and 7.2% higher than June 2022, according to data from the Office for National Statistics.

This increase comes against a backdrop of economic uncertainty and soaring inflation, but the figures should be treated with caution, given that the stamp duty holiday threshold was reduced on 1 July 2022, resulting in significantly fewer transactions that month, as the ONS estimated that UK residential transactions in July 2022 are generally similar to historic levels observed in July before the pandemic.

Richard Davies, MD of Chestertons, said: “We have seen a clear uplift in the number of viewings and the number of buyers registering with our branches in July. This increase in market activity suggests that, despite economic challenges and the changes to mortgage rules, buyer appetite remains on an upwards trend.”

“One driving factor behind house hunters wanting to move sooner rather than later are interest rates. With the Bank of England putting up rates more than once this year, many buyers have established a stronger sense of urgency. Another reason that drives buyer enquiries is that the market is seeing a post-pandemic reshuffle. After many house hunters put their search on hold or changed priorities over the past two years, we have since been registering enquiries from families wanting to finally make their move a reality as well as international students, international buyers and office workers who require a pied-à-terre closer to work again.”

Lawrence Bowles, director of research at Savills, commented: “Residential transactions rose to 110,970 in July of this year, making it the most active month in 2022 for home sales. This remarkably strong activity is a 7.2% increase on the number of property transactions that took place in June and 6.0% higher than the 201719 average.

“Mortgage interest rates have risen rapidly as the Bank of England has tightened monetary policy over the last few months. With rates continuing to increase, stronger levels of activity in July will in part be reflected by buyers accelerating their buying process to lock in lower costs of mortgage debt.

“The supply of homes onto the market has been below pre-pandemic levels since April 2021, while the number of sales agreed has exceeded the pre-pandemic average since July 2020. That imbalance has depleted the market of stock to buy. Lack of stock and increased affordability pressures on household incomes are expected to substantially ease levels of activity for the remainder of the year.”

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Jason Tebb, CEO of OnTheMarket, said: “Transaction levels climbed again in July after a dip in June, indicating that while the frenetic pace may have slowed, the housing market continues to show remarkable resilience.

“With the highest level of available stock in July compared with any time during the previous 12 months, we’re seeing the beginning of an inevitable rebalancing of supply and demand.

“Our own data indicates that sentiment remained positive in July with 80% of sellers confident they could complete a sale within three months. Remarkable confidence prevails despite considerable headwinds, with the most prepared buyers having the advantage.”

Nathan Emerson, Propertymark CEO, said: “These figures show the housing market remains stable with transactions up month-on-month, year-on-year and well above pre-pandemic levels.

“The cost of living is still rising and we are seeing evidence of buyers negotiating harder, bringing price increases down. But our data from member agents shows the demand remains strong and that there with not enough stock to go round with the number of new potential buyers seven times higher than new homes coming to the market.”

Iain McKenzie, CEO of The Guild of Property Professionals, said: “The level of activity in the market portrays a picture of strong demand that continues in spite of elevated house price growth.

“A rush to complete in the face of climbing borrowing costs will be partly responsible for this. Buyers can sense that interest rates are only moving in one direction and the landscape for mortgage applicants could look much tighter in 12 months’ time.

“Despite fears that the rising cost of living could affect household budgets, this always takes some time to impact on the housing market. Rates are still relatively low by historic standards, and this will need to change substantially before the market shows signs of a more acute reaction to the cost of living crisis. Transacting on a property is a long-term purchase often built upon decades of borrowing.

“However, we cannot necessarily expect the level of sales to drop back to their long-term average, this is in part due to the possibility of economic pain forcing more people to put their home up for sale in the coming months. That could cause a rise in the number of homes coming to market, while sky-high rents will put a floor under demand for those who can raise a deposit.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Nick Leeming, chairman of Jackson-Stops, commented: “Parallels between 2022 and 1976 appear to be growing by the day. Not only was 1976 the hottest summer on record until this year, but it was also the last time that inflation reached 18.6% in the UK, something that is touted to happen again in January 2023 following record energy bill rises.

“After a remarkable change of direction in transaction levels last month, the latest figures have been buoyed by the continual backlog of transactions that the market is working through. The market continues to see an inflow of committed buyers and sellers who have a strong sense of urgency for transactions to complete ahead of further interest rate rises. Until the 15th September at least, when the Bank of England meets again to vote on interest rates, the market remains a favourable one for borrowers with a base point of 1.75%

“To better understand where transactions should – and will – be as we move into 2023 is to cast our minds back to 2019. 2020 saw a market that nearly stalled and then 2021 followed with one of the most active and fast-growing markets we’ve ever seen, both therefore could provide inaccurate predictions of where the market could find itself in a years’ time.

“For now, in spite of wider economic challenges, the market remains in agreement that a sudden drop off in house prices and transaction levels is not the current direction of travel. Jackson-Stops latest branch data reflects this buoyancy, increasing property exchanges in July month-on-month by 40%. We’re continuing to see strong activity particularly at the top end and coastal hotspots such as Suffolk and North Yorkshire. Strong demand, committed cash buyers, and a market that continues to encourage borrowing, will all help to keep this ship on course. Parts of the market that may feel a cool breeze are the homes that have been optimistically priced which may make buyers think twice.

“The maze of red tape which has led to significant completion times will mean that sellers looking for a smoother completion should consider the full picture of a prospective buyer; it may not simply be the highest price that is the most appealing, those able to move quickest could clinch the sale.”

Andy Sommerville, Director at Search Acumen, said: “The latest figures show signs of a new normal for property transaction volumes for the immediate future. Although the heat of the post-pandemic property rush has burnt out, we are left with a strong residual market as families grow, downsizers relocate, and employment remains buoyant. This formula has ensured the wheels of the market have kept turning at a steady pace throughout July.

“Despite the cost-of-living crisis set to weigh heavily on consumer finances, the fact that property transactions are levelling out to steadier numbers month-on-month may be indicative of greater supply allowing for more potential buyers to enter the market. As homebuyers race to lock-in better mortgage rates while still available, we might also see a slew of properties come to market as sellers look to take advantage before house prices drop too far. An uptick in supply may not translate to fewer transactions, meaning it is entirely possible to see an extended period of strong transactional activity this autumn despite economic headwinds. These competing dynamics may push and pull the market in different directions and offset each other to some degree. Meanwhile, many caseloads remain victim to stifling backlogs and inefficiencies, keeping conveyancers on their toes.

“All of that translates into a turbulent time for the conveyancing market with law firms needing to drive efficiencies to cope with increasingly complex caseloads and protect themselves against the prospect of a slowing market in the coming months, with inflation rates now predicted by some to go as high as 18%.

“It’s never been more important that conveyancers invest in technological solutions. Once integrated, digital first processes dramatically cut transaction times, drive down the cost base and create a better customer experience, all of which will be pressing concerns for law firm leaders as they look to future proof their companies in an uncertain economy.”

By MARC DA SILVA

Source: Property Industry Eye

The average price of property coming to market in the UK has dropped for the first time this year, according to fresh industry data released on Monday, albeit at seasonally-normal rate.

Property marketing platform Rightmove said its house price index showed asking prices falling 1.3% this month, or £4,795, to £365,173.

It said prices traditionally fall in August, with the drop “on par” with the average of 1.3% over the last 10 years.

Rightmove said the summer school holidays saw “distracted” house-movers, especially those in higher-priced homes, put their plans on hold until the autumn moving season.

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Some of the more urgent sellers coming to market were pricing more competitively, it added, in order to capture the attention of suitable buyers quickly and attempt to beat the average time of 136 days to complete a sale and move before Christmas.

“A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays,” said Rightmove’s director of property science Tim Bannister.

“Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic.

“Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Bannister said to achieve that this year, they would need to beat the current average time between accepting an offer and completing the sale of four-and-a-half months.

“Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end the year at around 7% annual growth, even with the wider economic uncertainty.”

Rightmove said the recent sixth consecutive interest rate rise from the Bank of England, by 0.5% to 1.75%, would be in the minds of many would-be movers, and when combines with the rising cost-of-living would lead to reconsiderations of what they could afford to borrow and repay each month.

It said that at the moment, the mismatch between supply and demand was still the biggest factor influencing asking prices outside of seasonal trends.

Although demand was still softening and supply constraints were improving, there was still a “massive imbalance”.

Buyer demand this month was down 4% on the “frenzied market” of 2021, but was still 20% higher than in 2019.

The number of new listings coming to market was up 12% on the same period last year, though it was 6% down on 2019, while available homes for sale were down 39% on 2019.

Buyer enquiries to agents did not appear to have been “particularly dented” by the most recent interest rate rise, suggesting that many buyers were still committed to moving, and incorporating rate rises into their financial planning.

“Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years,” Tim Bannister added.

“It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move.

“Demand has eased a degree and there is now more choice for buyers, but the two remain at odds and the size of this imbalance will prevent major price falls this year.”

By Josh White

Source: ShareCast

The latest data analysis by estate agent comparison site, GetAgent.co.uk, has revealed that stock shortages are seeing one in 10 homes (11%) get snapped up within 14 days of entering the market, although in some areas this climbs to as high as one in five, as the pandemic property market boom shows little sign of slowing despite a string of interest rates adding to an uncertain economic outlook.

GetAgent analysed the level of new properties hitting the market and what proportion of these were being sold (SSTC) within just two weeks, as the nation’s homebuyers continue to battle it out for what limited stock is available.

It currently takes the average UK homeseller 97 days from the point they first list their home for sale until they find a buyer and the property is marked as SSTC.

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However, the latest analysis by GetAgent shows that across the UK as a whole, 11% of all homes to be listed for sale are accepting offers and being marked sold subject to contract within just two weeks.

Regionally, Scotland is currently home to the hottest market where the proportion of new homes sold within 14 days is as high as 18%.

In the South West, 13% of properties are being snapped up within two weeks, while in Wales, the West Midlands and East of England it’s 12%.

London is home to the slowest market in this respect, with just 7% of all homes sold within two weeks.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

At city level, Scotland remains top of the table, with Edinburgh (23%) and Glasgow (19%) seeing the highest proportion of for-sale stock selling within two weeks of being listed for sale.

Bristol also ranks within the top three at 16%, while Portsmouth and Birmingham are also amongst some of the most likely to see a home sell almost immediately.

Just Belfast ranks lower than London, where not a single home currently listed for sale on the market has sold within two weeks of first being put up for sale.

Co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “Since interest rates have begun to climb, the nation’s property prophets have been out in force to once again call the demise of the UK property market.

“However, we’re simply not seeing this on the ground and while there has certainly been a return to normality where mortgage approval levels and the rate of house price growth is concerned, buyer demand remains extremely high and property values are yet to show any signs of decline.

“In fact, the balance between supply and demand is so out of kilter that homes are selling subject to contract at pace and in many areas, with one in five doing so within just two weeks in some cases.

“Of course, this doesn’t make the protracted process between accepting an offer and completing on a sale any quicker, but it does cut a considerable amount of time from the overall selling timeline.”

By Brandon Russell

Source: IFA

While the UK may trail other European nations when it comes to the total proportion of the population that own their own home, it does lead the way when it comes to the might of the mortgage sector and the number of properties purchased by borrowing.

At 65.1 per cent, the UK sits well within the bottom 10 when it comes to the total share of the population that own their own home.

Only those in just France, Sweden, Denmark, Turkey, Austria, Germany and Switzerland are less likely to own their own home, while at 95.8 per cent, Romania is home to the highest level of homeowners as a percentage of the total population.

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Home ownership
When it comes to the proportion of these homeowners that have borrowed in order to buy, Iceland ranks top, with 63.9 per cent of all homeowners having a mortgage, according to data by real estate agency Henry Dannell, which analysed property market data across European foreign nations.

At 37.5 per cent, the UK ranks 10th in this respect, however, in terms of the sheer volume of homeowners financed via the mortgage sector, the UK sits top of the table by far.

In fact, over 25.2m homeowners in the UK have currently climbed the ladder with the help of the mortgage sector. Just Germany and France come close to this level, with an estimated 21.5m and 21m respectively.

Spain (13.5m) and the Netherlands (10.5m) are the only other nations where the number of mortgage-backed homeowners exceeds the 10m mark.

At the other end of the table, just 0.5 per cent of all North Macedonian homeowners have a mortgage, equating to just 10,353 of the homeowning population.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Despite being home to some of the most notoriously high house prices in the world, homeownership remains the predominant strain in the UK property market’s DNA.” said the director of Henry Dannell, Geoff Garrett.

This is despite the fact that property values have spiralled in recent years and we’ve seen a greater acceptance of long-term renting as a lifestyle choice from younger generations.

“The ability to buy with the help of a mortgage has been vital in helping many homebuyers realise their aspirations of homeownership and while mortgage-backed homeowners only account for just shy of forty per cent of the total market, this equates to a huge 25.2m people,” he said.

“This makes the UK mortgage sector by far the most pivotal and influential in Europe where the provision of finance in order to purchase a property is concerned,” Garrett concluded.

By MICHIEL WILLEMS

Source: City A.M.