- The price of property coming to market falls by 0.2% (-£656), the first monthly fall so far in 2019
- key metrics indicate a buyers’ market in the second half of 2019:
- Less property is coming to market, but it is taking longer to secure a buyer, so estate agents’ average stock per branch is at its highest since July 2015
- time to secure a buyer is at the longest at this time of year for six years
- Prices of newly-listed property down by 1.1% this month in the upper sector of four-bedroom-plus homes, while lower and middle sectors holding their prices better this month and year-on-year
- Market fundamentals remain sound apart from confidence, and buoyant mortgage approvals indicate more resilient activity in the lower and middle sectors. It is buyers at the upper end, who are less likely to need a mortgage, who appear most hesitant to engage
Various news sources have reported that the price of property coming to market has fallen by 0.2% (-£656) this month, making this the first monthly fall of 2019. Prices are traditionally weaker in the second half of the year, however this year also sees the highest total stock per estate agency branch since 2015. With continuing political uncertainty it is expected that buyers in market sectors where there is an over-supply will have a stronger hand negotiating lower prices in the coming months. With sound underlying market fundamentals, apart from the lack of confidence caused by the uncertain political outlook, there should be a better bargaining opportunity for those who have hesitated and missed the busier spring market if they can now find the confidence to engage without waiting for more certainty.
The amount of properties coming to market this month is down by 7.8% this month compared with the same period a year ago, and furthermore fewer sales are being agreed (down by 4.6% in the year-to-date compared to the same period last year). However, estate agents’ total average stock per branch is higher than at any time in the last four years. Average stock is now running at 53.3 properties, the highest number since the 54.0 that was recorded in July 2015. In addition, the average time to secure a buyer is at 62 days, the highest at this time of year since 2013. This longer time to secure a buyer, coupled with higher property stocks, suggest that it will be more of a buyers’ market in the second half of 2019.
Activity is more robust in the mainstream lower and middle markets, made up predominantly of buyers requiring a mortgage rather than cash buyers. The latest figures from UK Finance show that the number of mortgage approvals from the main high-street lenders in May was up by 9.1% year-on-year. New seller asking prices are also holding up better in these sectors, with typical first-time buyer property the same price as last month at 0.0%, while the typical second-stepper home is up slightly at +0.2%. The upper end, comprising four bedroom and larger properties where buyers are less likely to need a mortgage, has dropped by 1.1% month-on-month.
Agent & Expert Views
Carl King , Director of Fraser St James, comments: “ I feel at local level the market was slow at the beginning of the year, from May onwards we have seen a large increase in buyers as the Tameside and North West markets still are performing well. I believe people are sick of waiting for Brexit and are deciding to make the move. Many properties we list on the market sell within 2 weeks. So I believe people are just getting on with it. The market in very buoyant and prices in the area locally remain static after a price rise in the previous quarter. I still feel there is a lack of stock for the area and I hopeful this will improve by the end of the year.
We have seen an increase sales level on last year and feel the North West property market will remain strong."
Miles Shipside, Rightmove director and housing market analyst comments: “The housing market fundamentals remain largely sound in many parts of the country, but the current political climate means that the crucial ingredient of confidence has been impaired, and that is causing some potential buyers and sellers to hesitate. With record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty. Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the last four years, so there should be more choice of properties to buy. It could be a good opportunity to negotiate a relative bargain in the second half of the year, if they can set aside the continuing Brexit distractions.”
“Growing numbers of properties on agents’ books even though fewer properties are coming up for sale are evidence of a more challenging market, with more sellers competing to get their transaction over the line. With activity and prices often weaker in the second half of the year, it will be those sellers who are bold enough to price aggressively who will attract buyers with the confidence to act rather than hesitate. It would appear to be sellers in the upper end of the market who need to be boldest on pricing, as data shows that the middle and lower sectors are holding up better.”
“While buoyant mortgage approvals indicate more resilient activity in the lower and middle sectors, it is the cash-rich in the upper end who appear most hesitant to engage. They are often discretionary buyers, whose needs for more space or the motivation for a change of location can be postponed. As a result, sellers in the upper end have had to drop their prices more both month-on-month and year-on-year, suggesting that the best bargain opportunities in the second half of 2019 for canny buyers could be in this price sector. Buyers in all market sectors in the less buoyant south and east of the country are also in the driving seat, but greater market momentum further north means that sellers will still be able to steer clear of buyers who are looking for too cheap a ride on the back of Brexit uncertainty.”