More property owners with realistic price expectations are listing their homes for sale, as reflected by the latest figures from Rightmove.
The asking price data from the property portal reveals that the average price of property coming to market dropped slightly by 0.5%, or £1,505, from last month despite continuing strong buyer demand.
The fall in asking prices suggests that new sellers have joined the rush to sell and beat the March stamp duty deadline.
But it is worth noting that buyer demand remains high, up 28% year-on-year.
Tim Bannister, Rightmove’s Director of Property Data comments: “Given the ongoing mini-boom, prices might have been expected to rise again this month, but instead we have a slight dip which could be a result of some new sellers pricing more realistically to have a better chance of agreeing a sale in time to benefit from the stamp duty savings on their onward purchase.
“We know from a recent Rightmove study that sellers are twice as likely to sell if they agree a sale based on the first price at which their property goes on the market, something that’s even more important now as we move towards the end of March and the end of the stamp duty holiday.
“If your initial asking price is too high then you’re less likely to get an offer even after you’ve cut your price back to a more realistic level. Our revised prediction of a 7% annual increase in prices in 2020 looks to be on track, since the annual rate has jumped to 6.3% with a month to go.”
Regionally, the south is performing best relative to last year for the number of sales agreed, up by 72% in the East of England, and up by 69% in the South East.
Nationally, sales agreed are up by 50% on this time last year, a softening from the 70% year-on-year jump recorded in last month’s report.
Rightmove now estimates that there are 650,000 sales currently going through the buying and selling process. That is 67% more than at the same time in 2019, and illustrates the scale of the challenges now being faced by mortgage lenders and the legal profession to get these deals to legal completion.
Around a third of transactions in the pipeline would still be exempt from stamp duty after the holiday ends, due to being below thresholds or qualifying for first-time buyer exemptions, but even then there could others in the chain who need to rush to complete their purchase before 31st March.
Bannister added: “After some brief hesitation as people waited for the detailed government guidance and legislation, it’s now clear that home-movers are carrying on with their searches and sales during this second lockdown in England with the market staying open. This ongoing activity means that the processing log-jam continues to pile up because of the sheer number trying to reach the finish line by the end of March. With 650,000 transactions in the pipeline, millions of people are on tenterhooks until their sale or purchase has completed.”
Original Article from Property Industry Eye 16/11/2020