New figures have revealed that the average home in Great Britain took a whopping 49 days to sell in May, marking the longest selling time for any May since 2013. The data, provided by Hamptons, part of Connells, shows that larger homes faced considerably longer selling periods on average. However, there was a silver lining for smaller homes, as two-bedroom properties sold quicker than their three-bedroom counterparts for the first time in a May since 2010.
On average, two-bedroom homes were snapped up within 43 days, a whole three days faster than the average three-bedroom property. Sellers across England and Wales achieved 99.1% of their asking price in May, the highest share since October 2022. This marks the third strongest May for asking versus achieved prices since records began in 2009.
Hamptons was part of the Countrywide Group during the 2009-2021 period before being acquired by Connells. The data also revealed that one- and two-bedroom homes experienced smaller year-on-year declines in achieved pricing compared to larger homes, which faced the brunt of affordability pressures.
In addition, sellers of smaller homes have been accepting offers closer to their asking price compared to pre-Covid times in May 2019. While the market has weakened, there are still five regions in England and Wales where the average seller achieved over 100% of their asking price in May. However, the South West and North East regions experienced the largest annual decline in achieved pricing.
Although bidding wars have become less common for most homes compared to last year, competition among buyers has intensified for studio and one-bedroom properties. In May, 27% of studio and one-bedroom homes sold had three or more competing offers, a 1% increase from May 2022. While the share of homes sold through bidding wars has decreased year-on-year, they still remain more prevalent than pre-Covid times.
Aneisha Beveridge, head of research at Hamptons, highlighted an underlying trend in 2023 driven by higher mortgage rates, which has seen stronger demand for smaller homes. With affordability stretched, first-time buyers are opting for smaller properties, and early downsizers aim to pay off existing mortgages. This surge in demand has bolstered pricing for one and two-bedroom homes, while the larger family home market has cooled down over the past year due to the high costs of trading up.
Beveridge further noted that most housing market indicators have returned to tracking 2019 levels and have shown continuous improvement throughout the year. Falling mortgage rates have boosted confidence for both buyers and sellers. However, the recent upward pressure on mortgage rates could potentially exclude some buyers from the market. Despite this, it is unlikely that rates will reach their peak in Q4 2022, suggesting that significant changes in the market are not expected in the coming months.