Seasonal dip in August asking prices less pronounced
The price of property coming to the market fell by 1% in August, but this was a better performance than usual for the summer month, according to the latest index figures.
It means that the average asking price of £305,500 is now just 1.2% above a year ago, the figures from property portal Rightmove show, but sales are up by 6.1%, the highest for this time of year since 2015.
All regions recorded an increase in sales agreed year on year with North East, the East of England, and Yorkshire and the Humber leading with rises of over 10%. But Rightmove also reports a log jam in the legal process, with the backlog of properties sold subject to contract but awaiting completion highest for five years.
‘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,’ said Miles Shipside, Rightmove director and housing market analyst.
‘Whilst another approaching Brexit deadline is now nothing new for prospective buyers, this one may seem more definite, and therefore one to beat. 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,’ he added.
A breakdown of the figures shows that asking prices fell by 0.8% month on month in Scotland to £156,694 and are 2.5% above a year ago while in Wales they were up 0.3% month on month and 2.5% year on year to £201,221.
In the North East of England they fell 0.3% on a monthly basis and are up 2.5% year on year at £152,658, in the North West they fell 0.4% month on month to £199,456 but are 4% above a year ago and in Yorkshire and the Humber they were up 0.7% and 3.4% respectively to £195,380.
In the West Midlands asking prices fell by 0.7% month on month to £228,849 but are 1.5% higher than a year ago, in the East Midlands they fell 0.1% on a monthly basis but up 1.9% year on year at £227,383 and in the East of England they fell 0.6% month on month and are unchanged on an annual basis at £352,087.
Asking prices fell 1.7% month on month and 0.1% year on year in the South West to £306,935, in the South East they fell 2.1% month on month and 0.3% year on year to £401,198 an in London they were down 0.1% on a monthly basis to £617,208, but up 1.3% compared to a year ago.
‘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% 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,’ Shipside pointed out.
‘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,’ he added.
Ian Marriott, director at FHP Living in the East Midlands, believes that the impending Brexit deadline is 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,’ he said.
‘People have become frustrated. All sectors of the market are buoyant and particularly at the top sector of £1 million properties and above. 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 thing,’ he added.
There is a heightened sense of urgency, according to Glynis Frew, chief executive officer of Hunters. ‘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 quickly in light of the ongoing Brexit uncertainty, with buyers correspondingly capitalising on the new found affordability that creates,’ he explained.
‘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,’ he added.