Hamptons: We are not in a buyers’ market (yet)

The housing market hasn’t yet tipped in favour of buyers, new agency data suggests.

Figures from 550 estate agency branches across Great Britain under the Connells Group – compiled by its Hamptons brand – found that while low offers are more common, they aren’t being accepted and vendors are still securing sales around asking price.

Last month, according to Hamptons, one in five of all offers were more than 10% below asking price, up from 12% this time last year.  

However, only 7% of these discounted offers were accepted as sellers continued to hold firm.

Offers made at least 5% under the asking price remain less common than pre-Covid times however.  

Last month, 39% of all offers were at least 5% under the asking price, up from 22% a year ago.  However, this figure is lower than in April 2019 when 40% of all offers were hoping for the same discount. 

Bigger discounts are less likely to be accepted too - just 12% of the offers made at least 10% below the asking price were accepted by the seller last month, compared to 13% in April 2019. 

The average home sold in England & Wales in April achieved 99.0% of its asking price, the third strongest figure recorded in any April since 2009, according to the figures.

While this is down year-on-year, sellers continue to achieve closer to their asking price than they did pre-Covid, Hamptons said.

Back in April 2019, the average seller sold their home for 98.1% of its asking price.

Consequently, 26% of homes sold in England & Wales last month sold above their asking price, the highest share since October 2022 and up from 17% in April 2019. 

The uptick in asking to achieved prices has been driven by first-time buyers and investors, the agent said.

Last month the average investor paid 100.1% of the asking price for a property in England & Wales.  This makes them the only group who paid over the asking price on average.

Meanwhile the average first-time buyer paid 99.7% of the asking price in April, up from 99.3% in March, as lower mortgage rates boosted their buying power.

On a regional basis, the three Northern regions saw the biggest uptick in achieved prices.  Here, the average seller achieved 99.9% of their asking price in April, up from 99.2% in March.

Meanwhile affordability constraints in the South meant that asking to achieved prices only ticked up by 0.1% month-on-month to average 98.6% in April.  Wales, the region that’s seen some of the strongest price growth over the last few years, saw asking to achieved figures slip by 0.4% month-on-month.

While the average home in Great Britain took 49 days to sell in April, up from 28 days in April 2022 and 40 days in April 2023, generally this year’s sellers have found a buyer quite quickly, Hamptons claims.

Of all the homes that came onto the market so far this year, 23% sold within two weeks, the same proportion as in 2019.

This means that sellers are as likely to sell their home within 14 days as they were in April 2019.  However, homes are taking longer to sell than last year when a peak of 41% of homes that came onto the market in April 2021 sold within two weeks. 

Homes listed at £1m+ have bucked the trend.  Last month, a record one in four  homes in this category that came onto the market sold within two weeks, up from 23% in April 2022 and 9% in April 2019.  The average £1m+ home that sold last month came onto the market 51 days previous, 42 days quicker than the same time in 2019.

Last month, 48% of homes sold following a £1 or more price reduction in England and Wales, up from 27% in April 2022 and 44% in April 2019.  However, a third of these homes came onto the market before the New Year.

Sellers who listed their home in 2023 have been less likely to reduce their asking price than pre-Covid.  31% of all homes that came onto the market this year sold following a price reduction, lower than the 43% of homes listed and sold within the first four months of 2019.

There’s a clear North-South divide for price reductions.  While homes in the South are still more likely to be sold following a price cut, the increase in price reductions over the last month has been driven by Northern regions.

The share of homes sold following a price reduction in the North East, North West and Yorkshire & the Humber rose to 45% in April, up from 41% in March.  Whereas 50% of homes in the four Southern regions last month were sold following a price reduction, slightly down from 51% in March.

Aneisha Beveridge, head of research at Hamptons, said: “A single-digit annual increase in the number of new homes coming onto the market has not been enough to push stock levels to the point where the scales are tipped in favour of buyers.  

“While there are more buyers putting in cheeky offers than a year ago, the majority are unsuccessful.  Rather, sellers are sticking to their guns and are holding out for a figure which is closer to their asking price than in any April pre-2021.

“The £1m plus market has held up a little better.  Cash has played an increasingly important role in this sector of the market and has insulated buyers from interest rate rises the like of which haven’t been seen for nearly two decades.

“This all points towards a major price correction looking increasingly unlikely in 2023. 

“Rather, we expect activity to track 2019 levels throughout the remainder of the year as the market treads a more sustainable path."