It’s beginning to look a lot like a normal housing market

Data out today from Rightmove shows the predictable seasonal effect of around 0.7 per cent knocked off the typical asking price.

The portal, in its monthly price index, says it forecasts prices to rise by another five per cent in 2022, but with some of the edge taken off sellers’ pricing power by increasingly stretched buyer affordability, and more buyer choice boosted by previously hesitant sellers taking the plunge in the New Year. 

Even so, it says requests from home-owners to estate agents to have their home valued are 19 per cent up on this time a year ago, indicating that much-needed buyer choice will be coming to market in January.

The portal says strong buyer demand is carrying forward into 2022, with November showing buyer numbers 41 per cent up on 2019 (when the market was subdued by an imminent General Election) and still up three per cent on late 2020, when the market was booming. 

Even with two months of data yet to be reported, 2021 has already seen the highest level of completed home sales since 2007, and Rightmove expects 1.5m for the full year.

It says seven out of 10 properties advertised on Rightmove are currently marked as sold subject to contract, compared to just two out of 10 back in 2012. 

Tim Bannister, Rightmove’s director of property data, says: “The kind of frenzied market we’ve seen in the last 18 months happens only a few times in most home-owners’ buying and selling lifetimes, exacerbated by the even rarer event of a global pandemic pushing homes higher up most people’s priorities. 

“While the pandemic is still having an ever-changing impact on society as we head into the new year, we expect a housing market moving closer to normal during the course of 2022. A return to a less frenetic market due to more choice, and forecast slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months. 

“With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like many of this group are now gearing up to make it a new year resolution to move, so more buyer choice could now be on the cards. 

“A rise in interest rates is likely next year, and whilst a rise is often regarded as unhelpful to the market, a slowing of the fast pace of sales, and associated pace of price rises, will help the return to more normality that will suit many movers.”

Bannister continues: “Agents report that some previously hesitant sellers look to be lining up to launch soon, taking advantage of the traditional Rightmove Boxing Day bounce in buyer demand, as attention quickly turns from picking over turkey leftovers to picking suitable properties. 

“Others will look to follow another traditional pattern and come to market early in the New Year, allowing plenty of time for them to find a buyer and help the under-pressure legal process which is handling massive volumes. 

"Those who have been working out their finances as part of getting sale-ready will obviously hope to achieve the highest possible price. However, despite high demand, buyers will have limits to what they can afford or are prepared to pay. In addition, with the availability of stock so low, any property that sticks around stands out like a sore thumb and goes stale pretty quickly.”