Hamptons: Some sellers still ‘holding out for last year’s prices

Agents are securing sales closer to asking price but properties are taking longer to sell, new data suggests.

Analysis by Hamptons, using data from 550 branches in the Connells Group, found the average home sold in England & Wales last month achieved 99.1% of its final asking price, up from 98.5% in August.  

This meant that sellers achieved closer to their asking price than in any month since October last year, according to Hamptons.

While both mortgaged and cash buyers paid closer to the asking price, the biggest uplift came from those reliant on borrowing, according to the research.

As the number of lenders cutting rates gained momentum, buyers with the largest deposits were once again able to lock in sub 5% rates.  More affordable homes, where buyers are most likely to use a mortgage, saw a bigger monthly improvement in the ratio of asking to achieved prices than the top end of the market, Hamptons said.

Its analysis found that while the share of homes coming onto the market and selling within a week also rose in September to 9.5%, the average home that sold last month had been on the market for 57 days, making it the slowest September to sell a home in Great Britain since 2012.  

One-bed homes saw the smallest year-on-year increase in the time it took to sell, up by five days, whereas it took around a month longer to sell the average four-bed plus property.

Assessing price reductions, Hamptons said 54% of homes in England & Wales that sold in September had undergone a discount.

This marked only the second month since January 2016 when more than half of homes that were sold had previously been reduced.  These homes had been on the market for an average of 77 days before the seller reduced the price, up from a norm of around 57 days pre-Covid.  

This indicates that some older stock is selling where it’s priced realistically.  However, many sellers remain reluctant to chase the market down, Hamptons said.

Aneisha Beveridge, head of research at Hamptons, said: “While the sluggish nature of the market this year continues to weigh on some housing market metrics, encouraging economic news has meant others have fared better.  And last month saw the traditional post-summer holiday bounce kick into play. 

“Mortgage rates continued to fall in September as better than expected inflation data reduced the appetite for further Bank of England rate hikes.  This encouraged a bit more confidence and began to unlock moves from previously priced-out households.  Consequently, it was smaller, more affordable homes that were in greatest demand and where the market has seen the biggest improvement.

“With some sellers still holding out for last year’s prices, it’s the number of homes changing hands rather than their price that’s bearing the brunt of the slowdown.  Stock levels look to have peaked, having surged late last year on the back of the rising time it took to sell.  But with fewer homes coming onto the market, buyers are facing less choice than they were a couple of months ago, which in turn is putting a floor under prices.”