Six months on from the end of the Stamp Duty Holiday, the residential property market appears to be extremely buoyant. House prices have risen at the fastest rate for many years.
Although average house prices started to grow slowly at the beginning of January, they grew nonetheless and may continue to grow for the foreseeable future. With the cost of living also increasing, there is no certainty about which way they may go, but some lenders predict that the growth will slow over the next year. Many buyers are eager to move to a new home, but with a lack of suitable properties on the market up and down the country, some property transactions are beginning to stall.
Rightmove have recorded a new price record this March as the average price of property coming to market has jumped by 1.7% breaking £350,000 for the first time. The average monthly rise is the largest seen at this time of year since March 2004. There are now apparently more than twice as many buyers as sellers active in the market, which is driving competitiveness and prices sky high.
Where we are based in Cheshire, the majority of sales during the last year were semi-detached properties, selling for an average price of £248,884. Detached properties sold for an average of £455,643, with terraced properties fetching £195,614. According to Rightmove, overall sold prices in Cheshire over the last year were 5% up on the previous year and 15% up on the 2019 level of £259,743.
Homes are getting snapped up by buyers
At Myerson, we have heard of properties selling in under 15 minutes of them going onto the market and clearly this is not an issue limited to the North West. With the demand for new properties to the market being so high, estate agents are holding limited viewings and prospective buyers are being added to waiting lists. In most cases, they are only allowing people to view properties who have a mortgage in principle, have their current property on the market or, in some cases, have already agreed on a sale on their property. We are hearing from our clients and estate agents that many properties are going to best and final offers, and, as always, cash buyers who are chain-free are in a strong position. Now so more than ever, buyers who are chain free are desirable to sellers when accepting offers on properties so that they can try to eliminate the inherent risks of chains and, in particular, the chain collapsing.
Is the housing market in short supply?
Those looking to upsize at the higher end of the market are finding housing stock in short supply in certain areas across the country. This is compounded by intending sellers delaying in putting their property on the market until they have found a suitable property to buy. This is an understandable situation as, with so much uncertainty, clients feel that it is a big commitment to start the house selling process without having first found their dream home.
Supply is so short that we have seen estate agents and intending buyers pleading for properties of all sizes and in all price bands on social media, and estate agents are also doing letter drops in certain areas requesting properties for sale.
How do you manage a property chain?
We have seen multiple examples of chains of transactions breaking where the top of the chain has not been able to secure a suitable property to purchase. This has caused delays and doubts to those further down the chain. The dilemma that buyers and sellers are facing is whether to pull out of their purchase and find a new property to buy where the parties in the new chain might be in a better position or to wait for an indefinite amount of time for the top of the current chain to find their dream home. When there are many parties involved, this can undoubtedly cause problems and stresses throughout the chain right down to the first-time buyer at the bottom, as all those involved will be affected.
To help get around the uncertainty and delay – whether that be because the party concerned is being helpful or because they succumb to pressures from the chain – clients might ask if they should break the chain so that all of those who can proceed can do so, without considering the financial impact and the risk that they are putting themselves at.
Moving into short term accommodation
We are also experiencing cases where parties who have offered to break the chain at the outset of the transaction and move into alternative accommodation are now reneging on their promises, putting further pressure and emotional strain on clients who have already made arrangements to move swiftly. Breaking the chain is always a risky move as a party could find themselves in a position where effectively they become homeless, and clients often seek reassurance from their conveyancer to provide them with a timeline for completing on their new property. This is a timeline that we can rarely be sure on.
What do clients need from their conveyancer?
Moving home can be a worrying and stressful time and it is often quoted as being one of the most stressful events you can go through. With the residential market so hot, it is no doubt that quality service and rapid communication is at the forefront of a prospective client’s mind. Clients expect response times similar to other services providing same-day deliveries. Keeping clients in the loop and progressing transactions rapidly is of utmost importance when properties are scarce and stress levels are high. Conveyancers who can deal with their clients’ needs and provide reassurance through quality service are likely to fare well in this fast-paced market.
