House prices stagnate, while property market shrugs off election uncertainty

house-prices-stagnate,-while-property-market-shrugs-off-election-uncertainty

Asking prices in the UK remained virtually unchanged in June as some would-be sellers adopted a wait-and-see approach amid the general election campaign, according to the latest Rightmove House Price Index.

Following a month in which house prices listed on the site increased to an all-time high, there was a small £21 drop over the four weeks to 8 June. The average asking price now stands at £375,110 – 0.6% higher than it was in the corresponding month last year.

The property portal found that the top-end of the market registered a marginal decline of 0.6%, or £4,000 month-on-month, to an average asking price of £689,810. It said this end of the market had seen a slight drop in the number of new sellers, which may have come as a result of the general election. But other parts of the market appear to be working as normal, with the overall number of agreed sales up 6% and new buyer enquiries 5% higher compared to a year ago.

Rightmove’s Tim Bannister said: “It’s always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady. This election has followed a similar pattern so far, and the responses from our poll of over 14,000 people also supports the data, with the vast majority of respondents saying they will carry on with their home-moving plans.

“However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end. This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass-market.”

Pent-up demand is a key driver behind increased buyer and seller activity, despite mortgage rates remaining elevated for longer than anticipated, according to Bannister.

The Rightmove data shows that in the first four months of the year, the number of sales being agreed between buyers and sellers is 17% higher than in the same period in 2023, outstripping the 12% increase in the number of new sellers coming to market.

He continued: “Like pricing activity, these trends are being driven most by the top-of-the-ladder sector, made up of four bedroom detached and five bedroom plus properties. A lack of available homes for sale in this sector during the pandemic years, together with the rapid rise, and subsequent volatility of mortgage rates in the post-mini-Budget period, meant that activity in this sector was particularly susceptible to some potential movers taking a step back. Now, with mortgage rates more stable albeit still high, and greater buyer choice, many who had postponed their moving plans in this sector appear to be returning.

“We anticipate the number of completed sales transactions this year to reach around 1.1 million. Rightmove’s key lead indicators, powered by the UK’s largest selection of properties for sale and real-time data, suggest positive progress towards reaching this number of transactions. However, the lengthy time to complete a sale after finding a buyer remains a challenge for both agents and movers. The average time between agreeing a sale and legal completion is a painful five months, or 154 days. In total, it is taking over 7 months on average from a seller coming to market to completing their move, meaning that as early as it may seem, would-be sellers hoping to celebrate Christmas in a new home need to be coming to the market about now.

“The sluggish completion process in England is something that parliament is reviewing as part of its inquiry into improving the home buying and selling process. When compared with international markets, England’s average completion times are significantly slower, highlighting the substantial room for improvement. The creation of a more seamless process, which includes providing more accurate information about a home earlier to potential buyers, and better connecting the parties involved in the transacting process through technology, are two areas of improvement that Rightmove suggests would be most beneficial to movers.

“One strategy that Rightmove’s market-leading data has identified as providing sellers with the edge to speed up a sale, is to work with an estate agent to price competitively from the outset of marketing and avoid the need to reduce the asking price after coming to market. It takes on average 32 day for a sale to be agreed for a property that is priced right from the outset, less than a third of the 112 days that it takes if the home requires an asking price reduction before it has found a buyer.

“We expect that the improved market activity levels and conditions this year will result in higher transaction numbers at the end of 2024 than last year. However, the extremely lengthy legal completion process is a frustrating barrier to home-movers converting agreed sales into completed transactions more quickly. It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market. One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly.”

Property industry reacts to Rightmove House Price Index

Daily news email from EYE

Enter your email below to receive the latest news each morning direct to your inbox.