Cash buyers’ market
Ready cash and speedy sales will be king for home moving companies this year, says Kate Faulkner.
Looking at their weekly data from the start of the year, the first week in January 23 started off with net sales as a percentage of listings, nationally, at 27%. That looked pretty scary versus the same data from 2016 to 2019, which recorded an average percentage of net sales of listings of just under 41%.
However, the latest data is looking a lot better, sales have improved so much that currently they are around 56%. Although lower than previous years’ cumulative average of 63%, it’s still an awful lot better than it was at the start of the year.
What the averages disguise though is those areas not doing so well and those that are doing a lot better, and when we break the numbers down by region, we can see some areas are really struggling currently, despite the ‘happier’ national picture the indices are reporting. Currently, the regions that are doing much better than the average 56%, are:
- West Midlands (59%)
- Yorkshire and Humber (58%)
- North East and West (61%)
- Wales (59%)
- Scotland (80%)
Those areas struggling to achieve the ‘average’ net sales as a percentage of listings are:
- Inner and Outer London (42% and 51% respectively)
- East Midlands (47%)
- East (50%)
- South East and West (52% and 53%)
Zoopla’s FTB research
Looking at the data from Zoopla, this could perhaps be being driven by the fact that FTBs are driving the market this year – albeit unexpectedly. Their chart below shows that areas with the toughest affordability are the ones seeing the lower level of net sales versus listings. As a result, agents have a tricky task this year which is to try and match their stock to the local demand, whatever that might be in the area.
This year for many home moving businesses, cash will be king, so it’s key to make sure any business secured is done with a clear understanding of the buyers’ and sellers’ ability to move and to do so within a good timeframe.
That means being led by demand. Unlike the last few years when a successful strategy would have been to secure as many instructions as possible, knowing most would fly out the door, this year that could backfire financially.
Secondly, it means getting sellers and buyers as ready to go as possible, such as getting legal companies instructed the first day of marketing, or indeed securing property packs prior to the property going up for sale. This can save weeks in the buying and selling process and that can mean the difference between a cash positive or negative business.
Who will do well in 2023
Those companies that are led by demand this year and try as much as possible to match supply to local needs and get their buyers and sellers ready to move before they market or view properties, are the ones that will do well this year.
An added bonus to achieving this is that moving times will naturally shorten, this in turn will reduce aborted sales and even better, aid a smoother move for buyers and sellers.
