Rightmove has seen the highest number of sales agreed in the full month of July since 2020, as a result of “savvy summer sellers” being more realistic about the asking price of their homes.
Summer holiday distractions traditionally result in an August price drop, RM says, with average new seller asking prices dropping by a seasonal 1.3% (-£4,969) this month to £368,740. August’s price drop is in line with the previous ten-year average, it adds, returning to seasonal trends after bigger than usual asking price drops in June and July.
The average new seller asking price for a home has now fallen by £10,777 this summer but the report points out that there are still a significant number of vendors coming to market with a too-high initial price. One-in-three homes have undergone a price reduction during marketing.
Colleen Babcock, property expert at Rightmove, said: “Savvy summer sellers have read the room and are coming to market with even more competitive pricing than usual to really stand out and attract serious and active buyers. Astute buyers are now benefitting from new seller asking prices which are on average an enticing £10,000 cheaper than three months ago. Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale.”
“The strategy is working, with the number of sales agreed in the full month of July being the best at this time of year since 2020. Our data shows that for a successful sale it’s better to get the price right in the first place, but if a seller does need to reduce the price it’s better to act fast rather than waiting too long.”
The data shows that the number of available homes for sale is 10% higher than at this time last year, keeping the volume of homes for sale at a decade high. The number of sales being agreed is now 8% higher than at this time last year.
A “two-speed” market is becoming more evident, the report goes on to say: where a property doesn’t need a price reduction, the average time to find a buyer is 32 days. But if a home has needed a price reduction from its original listing, this average time to find a purchaser more than triples, to 99 days.
Rightmove’s daily mortgage tracker shows that buyer affordability has been improving, with the average two-year fixed mortgage rate now 4.49%, compared with 5.17% at this time last year, equating to a monthly saving of £117 per month for someone taking out a two-year fixed mortgage on the average home, based on having a 20% deposit and spreading the mortgage over 30 years. expects some further small mortgage rate reductions over the next few weeks but no major drops.
Babcock added: “Strong summer property sales as well as a stable level of new buyer demand bode well for the next couple of months. We usually see a busier autumn compared to the summer as the new school year starts and more focus returns to moving home. Autumn sellers may also be hoping to be in a new home by Christmas, but they would need to beat the average time to find a buyer and complete a home sale.”
Matt Smith, Rightmove’s mortgages expert, commented: “It was positive to see last week’s third Base Rate cut of the year, but the supporting commentary from the Bank of England suggests the opportunity for further cuts has narrowed. The markets are currently forecasting one more cut before the end of the year. Lenders have moved their rates downwards to remain competitive, but there doesn’t look like much room for too many further reductions if current market forecasts play out. We could potentially see some lenders squeeze their margin to gain a competitive advantage, but I don’t think this would play out across the market and would likely target specific segments of movers. Overall, with further data to be releases and external events to play out, I think it’s likely rates will remain pretty much flat from here, with only small movements up or down.”
Steve Beercock, executive director at Beercocks in Yorkshire & The Humber, commented: “August has started with some real momentum. We have already seen a surge of sales agreed in just the first week which is a very positive sign. Getting the price right from the outset in the current market is crucial, to minimise the risk of needing to cut the price later.
“Locally in Yorkshire & The Humber, we have seen particular strength in the mid to high-end market, with healthy levels of activity also coming from buy-to-let investors. Looking ahead, I expect September to be very strong.
Amy Reynolds, head of sales at Antony Roberts in Richmond, London, said: “July and August have both been busier than expected in Richmond, with strong agreed sales and very few fall-throughs. Realistic pricing from the outset is driving momentum, and well-presented homes – especially family houses in good school catchments – are attracting committed buyers. At the top end, stamp duty is a constant talking point. While the high cost is slowing some decisions, the desire for more space is still pushing people to commit.
“What’s surprised me most is the first-time buyer flat market in our area. It slowed after the stamp duty holiday ended but has now rebounded strongly. That said, there are still some well-priced homes sitting unsold, often because buyers are holding back [who] may see the property they like snapped up by someone else, so it’s always worth an enquiry to gauge the seller’s position.”
Mary-Lou Press, president of NAEA Propertymark, commented: “Despite recent changes regarding stamp duty, and the fact that there is still so much economic uncertainty, it is extremely positive to witness an uplift in sales being agreed and an increase in properties coming to the market.
“The performance of the property sector is a strong indicator of consumer confidence and it has been reassuring to see base rate cuts across the past few months that have helped to create greater levels of affordability. The last base rate cut was decided with a very slim majority by the Monetary Policy Committee of 5-4 in favour of lowering the base rate, clearly demonstrating how cautious the decision was overall. With inflation still not down at the initially targeted rate of 2% all eyes will be on the Bank of England as the year plays out.”
Read the orginal article: https://propertyindustryeye.com/realistic-pricing-sees-most-active-july-since-2020-says-rightmove/
