Record start to 2015 but sellers will have to work harder this year
- Highest ever Rightmove page views on Sunday 11th January and site visits to date up over 10% on last year, setting a bullish early tone
- Price of property coming to market up 1.4% (+£3,798) in a month where prices usually fall
- Upwards price pressure as the number of properties coming to market (+2%) fails to replenish agents’ historically low stock levels – currently 10% below same period last year
- Activity boosted by Stamp Duty savings of up to £1,250 for some first-time buyers – double incentive for early-birds as average property price in this sector is down by £1,132 this month
- In spite of the above and low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014: – election jitters and mortgage restrictions suggest a moderate reduction from the high transaction volumes seen in 2014
– 2015 will be the ‘Year of the Selective Mover’ – lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose
Prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce-back. More people are looking for property than last year, more sellers are putting their property up for sale, and new seller asking prices have increased this month by 1.4% (+£3,798) at a time of year when there are usually price falls. However, Rightmove cautions that sellers will not have it all their own way in the year ahead in spite of the bullish tone set by these early indicators.
Miles Shipside, Rightmove director and housing market analyst comments:
“Early 2015 statistics currently point in the right direction for home-movers, with the Chancellor’s early Stamp Duty Christmas present perhaps being the spur for people making New Year resolutions to get on with moving. There are more positive signs of early-bird activity rather than pre-election jitters or economic worries deterring prospective movers. However, we are only a few days into the year and it remains to be seen whether this initial flurry is sustained.”
The early bird has several advantages this year
Stock shortage will fuel price rises: New seller numbers are up 2% on last year and, while modest, this is the highest weekly run-rate over this period for several years. However, the supply of property coming to market is still failing to replenish agents’ stock for sale. Stock has fallen by 10% compared to the same period in 2014, creating upwards price pressure in popular areas, contributing to a 1.4% month-on-month asking price rise.
“The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop.”
Stamp Duty savings window: Rightmove’s updated House Price Index methodology introduced this month takes advantage of additional and more granular data that was not available at its inception in 2002. The Index now tracks typical property prices and supply for the main market sectors, including first-time buyers, second-steppers and the top of the ladder2. With the average first-time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250.
“Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first-time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit. First-time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market in the first-time buyer sector has increased by 10.5% in the last year.”
Harder to sell in 2015 than in 2014
Visits to the Rightmove website are up over 10% in the first 13 days of January versus last year. In addition Rightmove set a new record for pages viewed on the website on Sunday 11th January. These early indicators of increased property interest, combined with estate agents reporting low stocks of appealing property in popular locations, should give encouragement to prospective sellers. However, Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014. Election jitters could lower the number of property transactions rather than lower prices, resulting in a moderate reduction from the high volumes seen in 2014, but with average prices driven up by the more resilient activity in popular locations. In addition, we predict that many buyers who have jumped the hurdle of lenders’ selective criteria to secure a mortgage will be more fussy about the home they buy. The lack of the right quality property situated where people want to live may cause some to postpone their move.
“The popular properties that most people want will remain sought after and will remain both highly prized and priced. Less attractive property is available in many locations but has often been on the market for some time, though it could be an option for choosier buyers if the seller is more negotiable on price. Buyers deemed mortgage-worthy will value their hard-won purchase pots and want to spend them wisely. That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short. A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly.”
2015 will be the ‘Year of the Selective Mover’ on two counts – first because lenders have selected them as a good risk to lend to, and second because they will be very selective about which properties they choose. The high traffic volumes on Rightmove not only indicate underlying demand, but also people regularly searching for a property that suits their needs. With insufficient new build over the last few decades and a systemic change in the make-up of our current housing stock, buyers are dissatisfied with, and therefore dismissive of, some of what is up for sale.
“While you cannot change the location of a property, sellers can improve the appeal of their home in other ways to persuade today’s choosier buyers that the positives outweigh the negatives. Getting advice from estate agents about how to prepare or adapt your property ready for sale, pricing correctly to attract value-conscious buyers, and then getting it in front of as many of them as possible will be very important in 2015.”