Fewer sellers are cutting prices as demand remains high

Fewer sellers have cut prices over the past months but agency instructions have dropped, figures suggest.

Analysis by property data and estate agent prospecting platform Homesearch reveals only 5% of sellers reduced the price of their home last month, a 3% fall on the previous month.

Homesearch suggested this was an indication that the market is still wanting to capitalise on strong prices.

However, although sellers are standing firm on price, the data reveals that estate agents have experienced an 11% fall in instructions.

Sam Hunter, chief operating officer at Homesearch, said: “A drop in new instructions for estate agents in the past month could set alarm bells ringing in the market, point to a tightening of belts by homeowners and a nervousness to move home. 

“That may be the case and I don’t have a crystal ball, however I feel that you need to take this figure with a pinch of salt and have some perspective because we’re finding demand in the market is still incredibly high.

“From speaking with estate agents, the drop in new instructions could also point to a worry from homesellers that they won’t be able to find their next place to live, which has no direct correlation with the cost of living crisis or inflation. 

“There are still far too many buyers in relation to properties for sale, meaning homeowners are reluctant to put their property on the market if they can’t guarantee finding their next dream home.

“Only 5% of properties for sale being reduced in price in the same period, indicates prices are staying strong alongside demand.  

“Even in the face of constant interest rate rises, the war in Ukraine, further economic uncertainty – people ultimately still want to move house. We can’t ignore the impact of the cost of living and inflation could potentially have in the coming months but, for the moment, the market is still performing well.”
 

It comes as data released by Rightmove today revealed national buyer demand, measured by the total number of people contacting estate agents about available properties, is up by a quarter compared to this time in 2019, while the number of new listings is down by 11%.

The market is moving at record speed, with the current 32 days to find a buyer being the shortest ever, and the number of sales being agreed is up by 7% compared to 2019.

The portal said the strength of the market means that 16% fewer properties are seeing reductions in price after listing compared with 2019.

Rightmove also compared how many buyers and renters are contacting agents. 

It found that competition between buyers and renters for homes in many seaside areas is beginning to cool as more homes become available and coastal demand starts to ease.

Across all local seaside areas, competition is down by an average of 10% for buyers, and 1% for renters compared to May last year, according to the research.

At the same time, competition has increased across the 50 biggest cities in Great Britain by an average of 13% for buyers, and 29% for renters compared to last May, Rightmove said.

Nationally, total competition between buyers has risen 6% and 49% for renters compared with May last year.

Tim Bannister, Rightmove’s director of property science, said: “Since the market reopened at the beginning of the pandemic, there has been exceptional demand to move to coastal areas, and as the months progressed supply was increasingly unable to match demand. 

“Now, we’re seeing that though demand is still very high in many coastal areas, it has slowed from the heady levels seen in parts of 2020 and 2021. 

“We’re also seeing this on a national scale, where demand is very slowly easing compared to last year, but remains very high compared to 2019. As more choice becomes available in these seaside areas, we’re seeing some of the competition between buyers and renters begin to cool off, however, no two local markets are the same, and it will take many months for supply to reach a better balance with demand in many coastal areas.”