Following the activity of the first quarter we were unsure about how the market would move forward – would things quieten as we head towards the referendum or would the traditional spring market kick in and keep us all busy? In actual fact it’s been a bit of both and all rather complicated – our viewing figures are at an all time high, however the number of offers we are receiving on the back of those viewings are lower than we’d like. We are taking on plenty of property but a fair amount of it is second hand stock from smaller agents who have struggled with sales. We are interviewing for a new member of staff at the moment and it’s fascinating to hear what other local agents are saying about the market. In one word – tricky. It’s not that we’re quiet or activity is down, far from it, however speaking to others it would appear that we are the lucky ones, with many of my interviewees, especially from the smaller agents, having a seriously tough time. It’s fairly easy to see the reasons however, so I’ll do my best to explain.
In a rising market buyers will look at anything and offer almost immediately. As prices are going up, they will be worried that they have a fixed budget and if they don’t buy there and then, the type of property they want will be out of reach in a month or two. They would normally be happy to compromise, and if a property ticked seven out of ten boxes then that would be just fine. From 2010 to 2014 this was exacerbated by low stock levels and a huge appetite from rental investors, so house hunters really did have to make their buying decision in an instant. Fast forward to today however and it’s a very different picture.
The current market is not rising, there are concerns about the upcoming referendum and there is a lot of stock on the market. As we know, ‘time on the market’ has been rising steadily for the last six months and the average property now takes at least three months to sell. This therefore means that more property is on the market and so the cycle continues. Buyers are, quite literally ‘going round the houses’ before they commit – they know that they have time on their side and the chances are that if they see somewhere today, it will still be there in a week or two and the price will still be the same. With a well stocked market there is plenty to choose from so buyers can be picky and wait for the perfect property. Unfortunately for buyers however that the ‘perfect’ property doesn’t actually exist. I have sold homes from £100,000 to £15,000,000 and believe me, no matter what your budget, everyone compromises. If you can find a property that ticks eight out of ten boxes then you should go for it. If you can get to nine out of ten you’d be crazy not to.
I have heard a few buyers saying that they’re going to wait until after the referendum as they think that although there will be more people looking, there will be more stock. I have to say that I think that this is extremely unlikely. The market is fully stocked right now with the usual spring properties already out there and, having asked the managers in my region, we don’t know of anyone who is waiting to put their home on the market until after the referendum. The reality is that there are some very motivated sellers out there at the moment but they will be a lot less likely to take an offer after 23rd June. If we exit the chances are that they will hunker down, withdraw from the market and see what the rest of the year brings, and if we stay in then there will be little or no flexibility on price.
For all of the above, there are many buyers who frankly don’t care about June 23rd and just want to get on with it now. These are the ones that are focussed and motivated either because they really need to buy now for all the usual reasons – work, schools, need more space, growing or downsizing families – or because they feel that now is a great time to do so, and it really is! For buyers there’s a good supply of available properties across a range of sizes and prices (buyers often bemoan the lack of choice which they now have), some of which has recently come down in price making it more affordable. Sellers on the other hand who are looking to upsize (which so many of our vendors are) are delighted with the market as the gap between buying and selling is smaller than usual, and making it all the more affordable to make the move now. It’s too early to assess the achieved sale prices as the land registry data doesn’t normally come out until around 6 months after completion, but looking at the properties we are currently selling (as well as properties in chains with other agents), it’s actually not too far off the asking price – around 2% – 4% below asking on average. What is clear however is that it’s the cheaper versions of each property type that are selling the fastest.
This brings me neatly onto our usual round up of current stock. As ever, we look at what is on the market, at what price levels and how long places are taking to sell. The table below shows all of the fully available (not yet under offer) stock between the commons, from Bolingbroke Grove to Clapham Common and from Battersea Rise to Nightingale Lane (source: rightmove.co.uk):
|Type of property||No. available||Average time on the market
|Average £/sqft||No. available last month||Average time last month||Average £/sqft last month|
|1 bed flat||15||95 days||£984||10||91 days||£928|
|2 bed flat||55||71 days||£881||42||63 days||£911|
|3 bed flat||20||95 days||£815||11||61 days||£798|
|House||62||99 days||£843||46||74 days||£867|
The number of one bedroom flats has taken an uplift, as have asking prices. These properties really are measured in terms of £/sqft so despite a dip in both numbers and prices in March, they are back to the sort of levels they were in January & February. There has also been a continuing rise of two bedroom flats available, with a jump of over 30% from the previous month. Prices have also softened slightly and time on the market has risen by 13%. Three bedroom flats have also jumped in number from 11 to 20 and a good number of those being new build or developer converted Victorian properties. Three bedroom flats tend to have a lower number of enquiries generally so it’s unsurprising to see their time on the market extending by over 50%. As we would expect for the spring market, there have been a number of new houses coming to the market – and availability has risen by 35% from last month. This percentage uplift is entirely in keeping with previous years, however it’s the actual number of houses on the market which is unusual – 62 currently compared to 23 this time last year. Prices in terms of £/sqft are down marginally but again, the time on the market has jumped to well over three months. Finally, one very interesting bit of research is the percentage of properties on the market that are under offer. Despite the market being fully stocked at the moment, the percentage of properties under offer has remained at around 17% – 20% of the total number of properties available for the last year. This is a clear indicator that although properties are taking longer to sell, the same proportion of them are still selling – it all just takes rather longer!!
And that’s it for today. As ever I hope you find these updates interesting and do get in touch if you wish to discuss anything property related – I’ll always find time for a chat, either in the office or over the phone.