First drop in prices in 2019 signals buyers’ market later in year
Buyers could bag themselves a bargain in the second half of the year as high stock levels combine with lower prices, new Rightmove data has shown.
The price of property coming to market is down by 0.2% this month – which is to be expected at this time of year – while agents say fewer homes are being sold, equalling more choice for buyers.
Research also shows that market fundamentals remain strong, such as record employment, low interest rates and good mortgage availability, so buyers who hesitated in spring should now have better bargaining opportunities.
Rightmove’s property expert Miles Shipside said: “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.
“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.”
Fewer properties are coming to market, down by 7.8% this month compared with the same period a year ago, and fewer sales are being agreed (down by 4.6% in the year-to-date compared to the same period last year).
Average stock is now running at 53 properties, the highest number since the 53 that was recorded in July 2018. In addition, the average time to sell is at 62 days, the highest at this time of year since 2013.
Shipside adds: “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.”
The latest figures from UK Finance also 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%.
Shipside notes: “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.”
To read July’s House Price Index in full, click here.