HOUSE MARKET ANALYSIS: Plenty of choice but home buyers cautious

Currently, we are seeing a property market which, for once, has plenty of choice. Home buyers still want to move, but their ability and willingness to purchase are not enough to soak up the additional stock for sale.

In summary, as far as properties for sale are concerned, supply is high. Rightmove reports the number of homes available for sale at a 12-year high for the time of year. This means more competition for sellers, making a willingness and ability to adjust asking prices particularly important.

Demand is constrained by affordability. Rightmove says buyer demand is 9% lower than a year ago, with mortgage costs continuing to restrict what buyers can afford.

Transactions are taking longer to reach exchange. As reported in Phil Spencer’s commentary for Propertymark, one of the key concerns with longer transaction times, especially when confidence in the economy is low, is the greater risk of home buyers or sellers pulling out and sales collapsing.

Pricing realistically is essential. Propertymark reports 75 prospective buyers registered per branch and 46 properties available. These figures indicate interest and choice, but, as we all know, registrations do not necessarily translate into purchases.

Propertymark also reports that 83% of agents say properties are selling below asking price. TwentyCi provides more detail, reporting average agreed prices at 96% to 97% of marketing prices—equivalent to a discount of around 3% to 4%.

For all agents, making sure as much information as possible is available upfront can help buyers identify the right property and help transactions progress more quickly.

It’s also more important than ever to assess home buyers’ ability to afford a property. Buyers should ideally talk to a mortgage broker before they even start looking at properties online, so they understand what they can afford.