Despite all the recent speculation surrounding the housing market after the badly-received mini-Budget and regular talk of a possible slowdown, new research suggests that, in 2022, nearly a third (31%) of properties now receive an offer in an hour compared to only 7% in 2018.
Over a five-year period, meanwhile, almost one in five (17%) properties received an offer within one hour of a viewing. An even bolder 7% of buyers made an offer on a house without even visiting it, according to the data from MPowered Mortgages.
Properties receiving an offer in a day is up over the same period, rising from 26% in 2018 to nearly half (48%) in 2022. Some 12% properties have received an offer without a viewing this year (a trend that has seemingly been boosted by Covid and the rise in remote/virtual viewings), up from 7% in 2018.
To shed light on recent buying behaviour, the fintech mortgage lender has launched its inaugural House Pace Index, motivated by market conditions, government intervention on the housing market plus consumer behaviour of wanting to ‘buy now’.
The research revealed that 38% of properties that have been placed on the market in the last five years received an offer within the same day of a viewing, with only 14% securing an offer after a second viewing.
In London, where the market is uber competitive and demand is at its highest, the trend for offering quickly is at its most prevalent, with 37% of properties receiving an offer on the same day as a viewing. What’s more, 14% of homes in the capital – a hotbed for overseas investors - secured an offer without the buyer seeing the property in question.
It is the younger generation who are most prepared to take this more gung-ho approach, with 18-34-year-olds most likely to adopt this approach to house buying. Some 11% admitted to making an offer before seeing a property, in comparison to just 5% of 35-54-year-olds.
With the average age of a first-time buyer in the UK being 34, being quick to act could be down to inexperience coupled with fewer mortgage deals on the market, the study suggested.
The data also showed that, before making a first offer, buyers see an average of three properties, while 40% of buyers view only two properties before deciding the home is right for their needs.
Nevertheless, despite being quick off the mark, putting in a speedy offer won’t necessarily reap the rewards, with half of buyers having an offer fall through.
The top reasons why an offer fails are that the seller received a higher offer (32%), known as gazumping, problems appeared on the survey (25%) or there was a break in the chain (15%).
Additionally, the study revealed that 10% of offers collapsed because the buyer couldn’t secure a mortgage – a number that could rise with the current mortgage uncertainty that followed last week’s fiscal event.
Just over half (51%) of sellers reported they insisted on any first-time buyers having a mortgage in principle before accepting an offer.
“We are seeing lots of activity in the market as buyers race to lock in deals given the pace in which they are rising in the current climate and this data shows that offers are being made extremely quickly, despite a large proportion of these falling through. Our House Pace Index shines a light on changing consumer behaviour against a backdrop of rising mortgage rates and aims to prompt more consideration in the house buying process,” Stuart Cheetham, CEO at MPowered Mortgages, commented.
“The race to find a home can be a daunting prospect even more so now in an environment where mortgage rates are rising as part of the cost of living. Of the many hurdles a homebuyer faces, one element that can be largely controlled is the certainty of their mortgage and this will be even more important as rates continue to rise.”
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