October Seller Activity Plunges To 10 Year Lowpoint
The number of sellers looking to enter the market have fallen considerably in October.
Compared to the same time last year, seller activity has reduced by 13.5% with the 24,539 new listings per week representing the lowest total at this time since October 2009, according to Rightmove’s Housing Index for October.
Unsurprisingly, given the short-term political uncertainty permeating throughout the nation at present, sellers could also be reluctant to enter a market that offers limited pricing power as new seller asking prices are now 0.2% lower than October 2018.
Similarly, monthly housing prices are increasing at their slowest rate since October 2008, offering a marginal 0.6% increase compared with the 10% average autumn bounce of 1.6% growth between September and October.
However, it would seem that those in the market are serious about completing their house move with a reduction in fall throughs evident in October and at their lowest recorded levels since 2015.
Active sellers are reaping the rewards of reduced housing stock driven in part by a sustained buyer activity. The negligible 0.5% drop in buyers compared to a year ago is creating a competitive buying market vying to purchase such a depleted housing stock.
The autumn figures will be disappointing reading for many considering August’s recently published NAEA Propertymark Housing Report data suggesting buyers and sellers were returning to the market in record numbers.
Prospective buyer activity rose by 37% in August from 316 to 433 registered buyers per estate agent branch. The number of registered house hunters in August 2019 also represented a 35% boost when compared with the 320 per branch a year earlier.
Properties per branch also increased from 41 in July to 44 in August; this figure also towers over the 40 properties per estate agents branch from August 2018.
The numbers suggested the ‘wait and see’ trend in the market was evaporating with must-movers forced to return and make a move in the market.
Unfortunately, this buoyant activity is short lived as sellers remain reluctant to enter such an unstable market in the present.
Miles Shipside, Rightmove Director and housing market analyst comments:
“In a strange Brexit-induced paradox, thousands of potential sellers are holding back compared to this time a year ago, though the number of buyers agreeing purchases is virtually the same.
“Ironically, this means that those who are coming to market have a better chance of selling, so while some would-be sellers are being put off, it’s actually a good time to sell. Those who are ignoring the Brexit disruption have less competition from stay-away sellers, and their prospective buyers have less negotiating power, with a reduced choice of suitable alternatives.
”Some sellers are speculative, encouraged to try their luck if they judge that the market has a degree of froth which might increase their chances of banking a high price. With upwards pricing power now pretty flat, some sellers who are motivated by maximising their money seem to be holding back. They may be waiting for more certainty around both achieving their price aspirations and also the Brexit outcome.
“While the number of new sellers has fallen, many of those who might normally have chanced their arm this autumn might in any case not have been seriously committed to making a move happen. This is a price-sensitive market, so if sellers are not willing to be realistic on their initial asking price, or to accept a lower offer, they can end up wasting time for both themselves and their agent.
“Rightmove data shows that the percentage of sales agreed that have fallen through so far this year is the lowest since 2015. Sellers who are coming to market are fewer but more serious, and buyers seem to be serious too, with the number of sales agreed almost unchanged. Both parties are then working harder to successfully guide their precious “subject to contract” sale through to successful completion. Many people feel that finding their ideal property is a strong foundation for finding their happy at home, so it’s worth fighting for that comforting certainty in these uncertain times.”
Marc von Grundherr, Director of lettings and estate agent, Benham and Reeves, said:
“No fireworks and no explosions across the current property landscape, and while the market is more subdued than usual, this is of course going to be the case ahead of our supposed EU exit at the end of the month. This uncertainty has evidently caused many sellers to hesitate and sit tight however, a healthy level of sales are still transacting, and this is proof that the UK property market is yet to disappear down the Brexit abyss. With only the serious home buyer and seller deciding to enter the fray, we’re seeing less tyre kickers and as a result, a reduction in the number of sales falling through, which is another positive to take from the current climate.”
Nick Leeming, Chairman of Jackson-Stops, said:
“Although the UK is yet to experience an Autumn bounce it doesn’t mean one isn’t on its way.
“Today’s data shows that sales aren’t falling through as regularly as they have been, which suggests that the market is currently being driven by must-movers.
“Despite Rightmove’s figures showing that stock is currently lower across the nation, once the UK does leave the EU, whether that be on the 31st October or otherwise, I expect to see an increase in listings and greater activity levels, with the prospect of a modest uplift in property prices in the new year.“
Do you anticipate seller activity to experience a bounce following a Brexit outcome?