The increased seller numbers has resulted in the biggest monthly jump in agents’ unsold stock since May 2007, up from 70 to 74 properties per branch, the report also shows.
As property supply is increasingly outstripping demand, this month’s jump in new sellers’ average asking prices of 1.7% (£4,032) looks misplaced. London remains the exception as buyer demand pushes asking prices to a new record of £431,013.
With base rate rises looming, sellers who are keen to sell in the spring window should adopt ‘serious seller’ tactics, according to Rightmove. There are a larger than normal number of bank holidays coming up in the UK because of Easter and the Royal Wedding and estate agents usually see slower activity at these times.
‘This is a clear indication that the number of properties available to buy is not being matched by the number of buyers able to proceed. With buyers still struggling to raise the necessary finance, the net result has been the biggest jump in unsold stock on agents’ books that we have recorded in nearly four years,’ said Miles Shipside, director of Rightmove.
‘While stock levels normally increase during the first half of the year, this is a larger increase than normal. With government cuts starting to bite and interest rate rises still expected in the second half of the year, those who are serious about selling should look to price more keenly in the spring selling season,’ he added.
This month, a weekly average of 28,390 properties came to market, an increase of 9% on April 2010 and up 28% on April 2009. With the latest Bank of England mortgage approval figures showing no year on year growth at 40,302 in February 2011 compared with 40,582 in February 2010.
The report also shows that average asking prices have increased 1.7% in April compared to the previous month. ‘In May 2007 when we last saw an increase in stock levels of this magnitude its impact was lower as mortgage financing was freely available and market conditions were more buoyant. It is against this backdrop of a substantial increase in available property supply that new sellers have pushed up their average asking prices to 1.7% higher than those recorded a month ago. This is the fourth consecutive monthly increase,’ said Shipside.
With national average asking prices now £13,412, or 6%, higher in the four months since the start of the year, sellers and estate agents should take serious note of the growing imbalance between seller supply and the seemingly static number of buyers who are ready, willing and able to proceed, according to Shipside.
‘While local markets may vary, the marked growth in supply is a clear indicator that fresh sellers should on average be asking less for their properties rather than more. This gives serious sellers and in tune estate agents the opportunity to price below their less realistic competitors and stand out as offering better value to deposit strapped buyers. The negative consequences for the market are a longer period of adjustment in buyer affordability and lower sales transaction volumes,’ he added.
He warned that the outlook is mixed. ‘Our statistics and analyses indicate that the tough selling environment that the less wealthy areas are currently experiencing is likely to deteriorate further in the latter part of 2011. In these areas the spring moving season offers the best opportunity for sellers to achieve success if they embrace serious sales tactics,’ he added.
Nick Hopkinson, director of PPR Estates, said the report shows that the UK property market is approaching a ‘tipping point’ where sellers will have to drop their asking prices hard and fast if they really want to sell. ‘This latest data shows that properties just aren’t selling at anything like their asking prices anymore. Only the multi million pound prime London market, which effectively operates in a parallel universe with completely different supply and demand dynamics to the rest of the UK, is showing any significant sales activity,’ he said.
‘Potential homebuyers are still no closer to being offered realistic mortgage finance by the lending banks and are understandably not in any hurry to take on high debts given the overall economic uncertainty that the UK faces. Spring is usually the busiest period of the year for estate agents. I fear that many potential sellers are in for a nasty dose of reality in terms of the buying price offers they may or may not receive in the next few months,’ he added.
