OnTheMarket: Hypersensitive buyers reluctant to view ‘overpriced’ homes

The number of homes going under offer within 30 days of listing has dropped from 54% to 38% as buyers become “hypersensitive to pricing,” OnTheMarket (OTM) claims.

The portal’s latest Property Sentiment Index suggests seasonality returned to the housing market last month. 

Transaction numbers may be down month-on-month, OTM said, but motivated buyers and sellers are proceeding.

Jason Tebb, chief executive of OTM, said it is unsurprising that sales are slower compared with last year, given “significantly less property stock and abnormally high levels of demand, unusual for the height of summer and reflecting a very different market.”

While three quarters of buyers were confident about making a move, seller sentiment was not as strong as buyer confidence in August, reflecting the shift in power toward the latter, but even so, 61% of UK sellers were confident that they’d sell within the next three months in August compared to 63% in July. 

There are regional variations, with confidence decreasing in the North West and South East to 65% and 55% respectively in August, compared to 72% and 62% in July, while rising in the East Midlands to 65% in August from 57% in July. 

This divergence may reflect the fact that sellers are usually hyper-sensitive to activity in their local market as this information is easy to come by, noticing how long properties take to sell and for how much, OTM suggested.

Tebb added: “Challenging markets tend to shake out those who aren’t serious about moving as it’s more unlikely people will wish to view properties speculatively. In trickier conditions, it can be tempting to adopt a ‘wait and see’ approach until inflation is under control or mortgages are cheaper if there is no strong motivation to move. 

“Those who remain tend to be serious buyers who have to purchase or are keen to but are hyper-sensitive to pricing: if they don’t think it’s sensible, they may not even commit to a viewing. 

“Sellers should not be disheartened, as while buyers may be fewer in number, our data suggests that they are highly motivated. There is no reason why those sellers who take advice from a local agent and price sensitively can’t successfully transact. 

“While another rate rise can’t be ruled out, on the positive side, this has largely been priced in by lenders with a number reducing their mortgage rates recently.”