What does the busiest property market in over a decade mean for sellers and buyers?
The first week of April saw a record number of visits to a leading property portal in a single day, 9.3m accessed Rightmove on Wednesday 7th April reinforcing the undeniable point that property isn’t just hot at the moment, it’s very hot!
The demand from prospective purchasers is voracious and shows no sign of fading despite the fact that for many new entrants they will simply run out of time for the stamp duty holiday deadline (unless of course it is extended further).
Across all our regions buyers are scouring the internet ready to pounce on the newest listings, frantically shuffling diaries to ensure they secure an early viewing in the fear that they will miss out on the opportunity completely. Agents who thought the weeks following the reopening of the market on 15th May 2020 was ‘incredibly busy’ are now seeing the true nature of a buoyant market.
So as Rightmove and the Office for National Statistics report that the average asking price of properties coming to the market is at an all-time high, that UK property transactions hit the highest monthly level since modern records began in 2005, that 145,000 instructions in April have not been enough to satisfy the national demand – what does that mean if you are looking to buy or sell a property and why has this happened?
Quite simply the pent up demand caused by the pandemic has been released and that fuelled by the economic incentives offered by the government, cheap mortgages, household desire to move to less urban environments and to properties with more space to offer flexible home-working options ultimately combined with the growing confidence that the ‘roadmap’ is both realistic and achievable has resulted in a surge of buyer demand. Unfortunately, that demand has yet to be met by sufficient properties coming to the market which has essentially ‘super-charged’ the market yet further.
The number of properties coming to the market is up 3% on the same period in 2019 so it’s not that potential sellers are holding back just simply that buyer demand significantly outweighs the current supply. The number of sales agreed is up 55% on the same period in 2019 resulting in the proportion of available property stock being at its lowest ever recorded by Rightmove.
What does that mean for Sellers?
In short, if you were thinking of selling then now is the time to do it. Don’t get too carried away with the surge in market activity when considering value, a reputable agent will be able to advise on an appropriate asking price for your property and combine that with a sound marketing campaign. Overcooking the price can be a risky tactic, if it pays off you achieve a higher margin than expected but if not then you risk missing the initial interest and buyers may then wonder why the property is still on the market i.e. ‘what is wrong with it?’
Prepare your property for the market both physically and also in terms of the documentation, the process could be extremely fast and all being well you could soon have buyers lining up to view and subsequently offer on your property.
If you are looking to buy yourself then start looking now if you haven’t already, also note that the rental market is equally buoyant so the plan to sell and move into rented accommodation whilst you look for your next ‘dream home’ may be a little more challenging than you initially expected.
What does that mean for Buyers?
Whilst for property ‘location, location, location’ is often quoted as being the key factor at the moment for buyers its ‘position, position, position’. A genuine cash buyer who is in the position to purchase without the distraction of property to sell or finances to arrange gives themselves a great opportunity of being in pole position. For those not fortunate to be in that position it’s about being prepared, being prepared:
- with all financial arrangements in place as much as possible
- for the need to move quickly to view a property
- to work with the agent, whilst they are contracted to the client maintaining a positive and professional relationship will help your chances
- to submit a realistic offer with all conditions and supporting information available
- for the potential that with significant interest sellers/agents may opt for what is known as ‘a closing date/sealed bids’ so that the marketing process is not overly drawn out
- with a ‘Plan B’ as you may not be lucky enough to secure the first property you attempt to purchase
Gemma Miller, Associate and Residential Sales Manager with our Northumberland team, comments “The market took a brief respite over the festive period, much shorter than usual, but has since come back stronger and busier than I have seen in the last 10 years. Not only have we seen the number of viewing requests soar, but they are often followed up by several strong offers all within days of launch.”
Speaking about the increased competition between buyers Gemma stated, “In the last month alone we have taken several properties to a closing date with sealed bids due to the amount of buyer interest and ultimately seen offers accepted that have an uplift of at least 20% over the asking price and in a select few cases 40%”, but went on to clarify further “whilst that is still exceptional, of the remaining sales over the last three months only two have not hit their original asking price, the key is setting realistic prices from the outset”.
Whilst there was an initial expectation that 2021 would see a busy first quarter in the property market before the market then tailed off the extension to the stamp duty holiday combined with the optimism that we are steadily coming out of the economic turmoil caused by the pandemic, many now hold the view that this year will see activity levels remain healthy, confidence will grow and ideally so will the number of the properties coming to the market – consensus is now that the year will end positively in terms of property price growth and activity levels.
If you would like to talk to our team about selling your property contact us on 0333 920 2220.
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