What's happening with asking prices?
In the dynamic UK property market, one of the most crucial aspects to consider is the asking prices of properties. This is the amount that sellers are initially listing their properties for, and it can give us valuable insights into the current state of the market.
In the current UK property market, the average asking price for newly listed properties has risen by 0.5% (+£1,950) this month, reaching £368,231. Although this time of year typically sees a rise in prices, this is the smallest increase since 2008 and is significantly below the 20-year average increase of 1.4%. Despite this, the number of potential buyers has decreased compared with the post-pandemic market frenzy.
Currently, sales being agreed are 17% lower than last year, with only six in ten homes finding a buyer and being marked Sold Subject To Contract, compared with the eight in ten at the peak. It is still possible to attract buyers for the right property at the right price, but agents advise sellers to price their properties competitively from the beginning of the marketing process. Starting too high and reducing later may seriously damage the chances of a sale, yet many sellers seem to struggle to adjust their pricing tactics in this more challenging market.
Are buyers still buying?
The current property market is showing promising signs of stability, with the number of enquiries for available homes still 8% higher than pre-pandemic levels in 2019. According to Rightmove data, properties that receive their first buyer enquiry on the first day of marketing are 60% more likely to find a buyer and be marked Sold Subject To Contract, highlighting the importance of creating immediate momentum. Estate agents report that the most successful sellers are those who stand out by pricing their properties most competitively against similar ones for sale.
Correct pricing is crucial to success, as accurately priced properties find a buyer in less than half the time of those that need a reduction. In addition, sales of correctly priced properties are also 50% less likely to fall through. Working with a local estate agent to get the price right the first time, rather than testing a higher price and then reducing later, is essential for serious sellers.
Whilst mortgage rates remain higher than in previous years, the more stable mortgage market is providing home-movers with more confidence about what they can afford. Two-year fixed rates are now below 6%, with both two-year and five-year mortgage rates lower than this time last year. The average house price to earnings ratio has also decreased by close to 10% in the past year, indicating that buyer affordability, whilst still stretched, has improved compared with last year. Fixed mortgage rates have fallen for 11 consecutive weeks, with the average five-year fixed rate dropping from 6.08% to 5.43% over that period. Rates in some loan-to-value brackets are now below 5%, with others edging closer to sub-5%.
“Mortgage rates continue to trend in the right direction and have now dropped for 11 consecutive weeks, with buyer affordability gradually improving compared to this time a year ago. Those with a larger deposit have seen the biggest benefit from recent rate drops, with rates for those with a smaller deposit, typically those further down the housing ladder, not dropping as quickly. The mortgage market is much more stable right now compared to three months ago, giving movers a little more assurance over the rate they are likely to be offered and therefore what they are likely to be able to afford. Those looking to secure a new home for the new year should apply for a Mortgage in Principle to work out what they could afford, and listen to local estate agents about what’s happening in their local housing market.” Tim Bannister Rightmove’s Director of Property Science
For a local perspective
If you would like to gain a detailed insight into what is happening in the Bromley property market, call our team on 020 8467 8304.