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Pre-Brexit buying spree with sales agreed up by 6.1%
- Seasonal monthly fall in price of property coming to market, down 1.0% (-£3,192), a better performance than usual in August, pushing the annual rate of increase to 1.2%
- Buyers spurred into action by improved affordability and opportunity of securing a deal prior to Brexit deadline:
- Highest number of sales agreed at this time of year since the same period in 2015, up by 6.1% on 2018, helping to make up for the slower start to the year
- All regions see a year-on-year increase in sales agreed, with North East, East of England, and Yorkshire & the Humber leading the country with rises of over 10%
- Log-jam in the legal process, with the backlog of properties sold subject to contract but awaiting completion highest for five years
The average price of property coming to market falls by 1.0% (-£3,192) this month. This continues the usual pattern of decreases in the month of August, as new-to-the-market sellers at this time of year tend to have a more pressing need to sell, and price more cheaply to attract holiday-distracted buyers. However, buyers seem much more focused on securing a property this year in contrast to recent summers, with the highest number of sales agreed at this time of year for four years.
Miles Shipside, Rightmove director and housing market analyst comments: “Surprisingly there seems to be a bit of a summer buying spree, despite it normally being a quieter time of year. For some reason more buyers have cottoned on to the fact that it can be a good time of year to buy, with less competition from other buyers, and sellers typically more willing to accept a lower price. Whilst another approaching Brexit deadline is now nothing new for prospective buyers, this one may seem more definite, and therefore one to beat, with the Government regarding this one as ‘do or die’. While the end of October Brexit outcome remains uncertain, more buyers are now going for the certainty of doing a deal, with some having perhaps hesitated earlier in the year.”
The number of sales being agreed is up by 6.1% compared to the same month a year ago, helping to make up for the slower start to the year. All regions have seen an increase in volumes year-on-year, with three having increases above 10%. The uplift in sales activity is biased towards the east coast, with the North East up by 13.6%, East of England by 12.7% and Yorkshire & the Humber by 10.1%. Two of these regions are the cheapest in England, but parts of the East of England are higher-priced London commuter belt, although still cheaper than the neighbouring South East region.
Shipside adds: “More prospective movers are taking the plunge, getting stuck into deals with sellers more willing to lower their price expectations, and lenders wanting to lend and offering low rates. There’s only so long that buyers and sellers can delay the familial, financial and emotional forces driving the need to move, and with the average time between agreeing a sale and moving in being more than three months, we’re now entering the last chance saloon for those who want to have finished their move before the end of the year. We often see an autumn activity bounce, but perhaps this year’s political activities have brought that forward into a summer surge as buyers have gone bolder and earlier than usual. This increased activity has led to new seller asking prices falling by only 1.0% in the month, compared with the 2.3% fall of the same time last year, which has driven the annual rate of increase to 1.2 %, the highest since September 2018.”
One of the challenges that buyers face after having agreed a purchase is the delay in turning that agreement to move into the binding reality of legal completion and actually moving in. The number of properties that are sold subject to contract and stuck in the legal process log-jam is at its highest level since June 2014.
Shipside notes: “It’s an anxious time for all involved once a sale has been agreed subject to contract, and that includes the estate agent whose livelihood depends on the sales going through rather than falling through. A major factor that might help these moves to actually happen is that it seems more buyers and sellers are convinced it’s a good time financially to do a deal, plus wanting the certainty of getting the deal signed and sealed because of the next looming Brexit deadline.”
Ian Marriott, director at FHP Living in the East Midlands, comments: “I think the impending Brexit deadline that is looming over us could well be having an impact on activity in the market. People were more cautious at this stage last year than this year, so we’re seeing that people are getting on with their lives and pushing through with moves ahead of the October deadline. People have become frustrated; all sectors of the market are buoyant and particularly our top-of-the-ladder sector, which are £1 million properties and above, is very healthy. We expect there might be an influx of properties coming to market after everything has settled down with Brexit, but right now, there are less buyers and fewer properties on the market, but the buyers who are in the market are viewing and motivated and getting on with things – they’re doers. These people aren’t just viewing on a whim, because there isn’t as much of a selection.”
Glynis Frew, CEO of Hunters, added: “There is little doubt that the market continues to face its inevitable challenges, yet the results also appear to reflect a heightened sense of urgency in some respects. That’s especially the case when you consider that August has historically been a bit of a quieter time for the housing market. Many vendors at this moment in time seem happy to demand slightly lower asking prices if it means they can get the deal out the door as quickly as possible in light of the ongoing Brexit uncertainty, with buyers correspondingly capitalising on the newfound affordability that creates. The ‘wait and see approach’ doesn’t seem to be as attractive as it once was and the more confident buyers are well suited to this change. It will be interesting to see how the market responds in the next couple of months once it has adjusted to the new Prime Minister and political chatter surrounding all things Brexit.”