How to navigate the tough market to your advantage

This May, we saw almost twice as many properties listed for sale across the UK than there were in May 2022. With sellers’ high price expectations, paired with buyers’ nervousness around finances, sales have slowed down - and many agents are feeling the struggle.

Just one year ago, there were 244,000 active listings… however in May of this year, we saw approximately 400,000 properties listed for sale. These figures indicate that the market’s quick turnover is slowing, and it’s shifting from a Seller’s Market to a Buyer’s Market.

Yet, due to external economic factors like the Cost of Living Crisis and the threat of a recession, there isn’t the same property demand from buyers and there is a real lack of urgency compared to previous years.

Properties are now taking much longer to sell, giving buyers the chance to mull over their decision to purchase. Something which is only worsened by increased mortgage rates potentially putting off buyers and vendors’ inflated property value expectations that have been carried over from last year’s property boom.

So, in this tough market, how can you find stock that will actually sell? And where should you be focusing your prospecting efforts?

Currently, one of the most powerful prospecting strategies is targeting properties that have reduced in price. It seems simple, but this one tactic will help agents secure stock that is going to sell - ensuring a healthy cash flow over the coming months.

Here’s why…

While some vendors are happy to wait and hold out hope in achieving the highest possible price for their property, a reduction strongly indicates that a vendor is highly motivated to sell and is more flexible in approach.

Plus, due to external economic pressures, buyers are aware they are in a position of power and therefore are more focused on finding a ‘bargain’. Agents who take on motivated sellers are more likely to find common ground between both parties and move forward to offer.

More sellers are now coming to terms with reasonable pricing.

Last month, more than 72,000 properties reduced their listing price. For context, that is a 73% increase in reductions compared to the same month last year, and a 42% increase on the 5-year average.

Furthermore, already this year, 22% of properties have dropped their price more than once - indicating that there is a real hunger for vendors to sell their properties. And this needs to be factored into your current prospecting strategy.

Taking Spectre as an example, agents easily target reduced properties by sending prospecting letters and marketing material after the initial reduction. But not only that, they can create a full timeline for communicating with the vendor - following up with them post-reduction too.

In fact, the reduction letter is proven to be the most effective prospecting letter an agent can send - securing the highest percentage of instructions. This is because the agent’s marketing lands at the most perfect time… when a vendor is beginning to lose faith in their current agent and likely to be unhappy with their current service after potentially multiple reductions.

There is light at the end of the tunnel.

Lower than past few years

Ultimately, while sales figures may be lower than we’ve seen in the past couple of years, there are ways agents can re-strategise to see greater success throughout the second half of 2023. It can’t be denied that the economic uncertainty, rising inflation, and cost of living pressures are all having a negative impact on the market.

That being said, the market does present some benefits to agents, namely the lower-than-typical percentage of fall throughs.

Last month, there was a 22% decrease in fall throughs compared to May 2021, and a 15% decrease compared to May 2022 - suggesting that if a buyer commits, they are more certain about their purchase than previously. This along with the increasing number of reductions can be used to agents’ advantage.

It is vital that agents grasp a deep understanding of the market and look for loopholes where prospecting can work in their favour. With Spectre’s quarterly Market Report, agents can get a detailed view of the market - with full commentary on listing activity, trends, regional differentiators, as well as expert predictions for the next quarter.

If you’re intrigued to find out more about the shifts in the market, look out for Spectre’s Q2 Market Report coming soon.