Asking prices are at a virtual standstill as the summer lull kicks in, according to the latest Rightmove index.
New seller asking prices dipped very slightly over the past four weeks, with the average down 0.1 per cent, equivalent to a loss of £248 on a typical asking price.
However, the number of properties coming to the market has jumped up by 8.6 per cent compared to same month last year, but there has been no corresponding increase in buyer numbers to soak up new seller influx - sales agreed are holding steady with a negligible 0.2 per cent fall compared to the same month a year ago.
Stock for sale per agent is now the highest since September 2015, meaning - says Rightmove - that sellers in areas of over-supply need to compete harder on price, presentation and promotion of their property to attract buyers.
And, mirroring a survey from the website Home which we reported on last Friday, Rightmove says the proportion of sellers already on the market that are reducing their asking prices is the highest at this time of year since 2011.
“At this time of year many potential sellers are more focused on erecting sun umbrellas as opposed to For Sale signs, and would-be buyers are equally distracted by their summer holidays. So while an increase in seller numbers is a welcome sign of more liquidity in a generally stock-starved market, it has unfortunately come at a quieter time of year” suggests Miles Shipside, Rightmove director and housing market analyst.
The growth in new seller numbers and the flat level of sales agreed numbers have resulted in an increase in total stock per estate agency branch. Nationally the average is 52 properties per branch, the highest level since September 2015.
“The number of sales being agreed by estate agents is consistent with the same month in 2017 and is holding up well considering the uncertain political background and stretched buyer affordability” continues Shipside.
“Most regions in the middle and north of Britain have brisk market conditions where buyers eagerly soak up extra supply of suitable property coming to market, and where there is enough momentum to support an increase in prices. With less momentum further south, any increase in property coming to market often leads to more property choice and gives buyers more negotiating power” he adds.
There are a third of properties currently on the market that have been reduced at least once since they first came on to Rightmove, which is the highest at this time of year since 2011.
Shipside advises: “A reduction in asking price is often a sign of initial over-pricing by estate agents and sellers, and whilst a price cut can boost buyer interest you have to overcome the negativity that arises when a property has not been snapped up quickly.”
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This is the calm before the storm. But for agents, the storm could be very positive. I believe that this Government will fall in the Autumn, and that a General Election will follow in which Mr Corbyn will be elected. They will introduce an immediate Budget with a significant Land Tax element to it, steeply sloping upwards for higher value properties - probably tied to a SDLT reduction for 'downsizers'. This will have the long-awaited, and much needed, effect of flushing out all those Baby Boomers sitting in ridiculous sized properties. The market will be flooded with larger properties, prices will inevitably fall quite a bit at the top end, but the market will then once again be liquid and agents can make a living again! This will be beneficial for the country and for our industry.
All aboard the Labour train !
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