For the last couple of years, there has been a serious shortage of stock in the sales market. In November 2020, the average agent had 66 properties on their books. By January of 2023, that number had sunk to just 42, a fall of nearly 40% (source: Rightmove). It may have helped support house prices during some challenging times, but for the market to function properly, buyers need choice. If they don’t, they, in turn, elect not to sell, further exacerbating the problem.
That’s why Rightmove’s report of a record number of sellers listing post-Christmas is such good news. According to the data, on Boxing Day alone, more than 10,000 new properties came onto the market – the largest number in over a decade. Such a pronounced surge in property for sale could have pushed the balance between supply and demand too far. Fortunately, at the same time, traffic on Rightmove’s website also spiked. Visitor numbers were up 273% from the previous day and buying enquiries were up 17% compared to the previous year. The stats are so good that many commentators are now revisiting their predictions for house prices in 2024.
The drivers behind it all are plain to see – many buyers (and sellers) had been sitting tight, while mortgage costs soared. However, at the end of autumn, the base rate finally reached its peak and then, in the run-up to Christmas, lenders started slashing their mortgage rates. Some by as much as 1%. It has not only reduced buyers’ costs, it has also given a substantial boost to the market’s confidence.
Even more encouragingly, it is likely that mortgage rates will continue coming down. although only by small amounts until there is another reduction in the base rate, sometime towards the back end of this year. Those falling mortgage costs also mean that, with rents soaring, there is increasing motivation for tenants to get themselves onto the first rungs of the housing ladder.
Rightmove’s Tim Bannister says:
“The scale of this year’s Boxing Day bounce is an early positive sign at the start of the year that buyers and sellers are out there and taking action, likely including some movers who had put their plans on hold last year.”
if you are thinking of selling, though, you should be aware that the market remains highly price-sensitive. It is still in the early stages of recovery and more choice means more competition between sellers. And buyers are likely to want to negotiate – the average is currently around 5.5%. It means, that if you overprice your property when you first put it on the market, you risk it going stale and that will not only make it harder to sell, but it will also take longer.
Tim Bannister goes adds:
“Accurate and realistic pricing for the local area is the recipe for success for sellers in 2024, and it’s been proven that over-optimistic pricing makes a move much less likely.”