Introduction:

The UK property market is experiencing a slowdown, with properties taking longer to sell. However, according to a market update from leading agency brand Hamptons, there is no evidence of significant discounts on asking prices yet. Despite rising mortgage rates, buyers are not successfully negotiating big price reductions, indicating that sellers remain firm on their pricing. This blog post will explore the current state of the property market, shedding light on the reasons behind the slower pace and the implications for buyers and sellers.

Slower Sales and Persistent Asking Prices:

Hamptons’ data reveals that 52% of homes sold in June across England and Wales went below their asking price, which is consistent with the previous month. These properties sold, on average, for 4.4% below their initial asking price, a figure that has barely changed. While there were fewer mortgaged buyers who had an offer accepted below the asking price, a higher proportion of them paid over the asking price. This suggests that sellers are holding firm on their pricing, despite the longer selling times.

Extended Selling Time and Buyer Caution:

In June, it took an average of 15 days from the moment a buyer registered their interest to make their first offer on a home. This duration represents the longest time recorded in any June since at least 2014. The trend of extended selling time is evident when comparing the figures with June 2022 (13 days) and June 2020 (8 days), when the housing market rebounded after the initial COVID-19 lockdown. First-time buyers, however, showed more enthusiasm, submitting an offer on average 12 days after registering their interest.

Hamptons reports that, on average, it took 52 days from the moment a home was listed for it to receive its first offer in June. This period is 19 days longer compared to June last year and represents the second-longest duration since at least 2014, excluding the COVID-19 period. Sellers across Great Britain are now taking 48 days on average to accept an offer, which is 19 days longer than in June 2022. Consequently, this is the slowest time to sell in any June since 2013, according to Hamptons.

Caution Does Not Equate to Large Discounts:

Although buyer caution is influencing the slower pace of the market, there is no clear evidence of substantial discounts on asking prices. The increase in the number of homes on the market compared to June 2019 (19% more) is primarily due to the extended selling time for each property. Additionally, with 11% fewer homes entering the market than in 2019 and only 4% fewer prospective buyers, the supply-demand imbalance is preventing significant price drops. Most vendors are willing to wait and see what the future holds, hoping for better prices and lower mortgage rates.

Optimism Amidst Rising Mortgage Rates:

Conveyancing comparison website Reallymoving analyzed 174,000 quotes on its platform and suggests that house prices may actually be 1.6% higher during the third quarter of 2023. This data, which represents 10% of the housing market, indicates that there is still a considerable number of highly motivated buyers willing to pay higher prices and absorb increased borrowing costs to secure the properties they desire. The rise in downsizer activity is also contributing to this trend.

Looking Ahead:

While the possibility of price falls remains if more forced or motivated sales occur, the current market conditions do not show signs of sellers being compelled to accept lower offers. Buyers are advised to have a mortgage offer in principle and consider the possibility of short-term property value fluctuations. Ideally, home movers, especially those with small deposits, should plan to stay in their property for at least five years to ride out any market fluctuations.

Conclusion:

The UK property market is facing a slowdown, with properties taking longer to go under offer. However, sellers are not yet willing to negotiate large discounts on asking prices. Buyer caution, rising mortgage rates, and extended selling times contribute to the current state of the market. Despite this, there is still optimism, as highly motivated buyers and downsizers remain active, potentially pushing house prices higher. Buyers and sellers alike should carefully consider the market dynamics and plan for the possibility of short-term price fluctuations to make informed decisions in the current real estate landscape.