Estate agents report wide variances in supply-and-demand dynamics between neighbouring patches, and also within property types in the same area. The affluence of purchasers seeking to buy in a particular location remains the decisive factor.
Miles Shipside, commercial director of Rightmove comments: “Rarer property types in desirable locations are achieving record prices. For ‘location, location, location’ you can also read ‘cash, cash, cash’. Conversely, in areas where buyers have less access to cash or mortgage finance, or there is an over-supply of a certain property type, then sellers are having to price much more aggressively to secure a sale. There is increasing divergence between these different markets, with agents reporting some pockets where a couple of viewings find a cash-rich buyer, whereas a few miles down the road it’s taking over 20 viewings to achieve a sale”.
This month’s index measures the asking prices of 129,898 properties that estate agents have put on the market, meaning the weekly average has now been over 25,000 for the last two months. This is the longest period that supply has been sustained above 25,000 properties per week since August 2008. If buyer demand was keeping pace, Rightmove expect this to result in a fall in average unsold estate agency stock. However, at present unsold stock is still increasing, with a month on month rise from 65 to 68. This is the highest level of choice enjoyed by prospective buyers since October of last year. The market is approaching a pivotal point in terms of supply and demand.
There is nearly always a time-lag in spring as the number of properties for sale initially increases as fresh stock comes to market, and then falls back again as sales pick up. Lack of property for sale and the consequent restriction in choice, especially in popular areas, have been supporting prices during the recession and the early stages of the recovery. Wherever over-supply occurs, this market will be especially prone to downward price pressure. This increased choice for potential buyers, combined with the impact of the inevitable post-election austerity measures on personal finances, could lead to some of the price gains seen so far being whittled away by price falls later in the year in all but the most popular areas. Currently average national asking prices are still 6% higher than a year ago.
Miles Shipside comments: “With weather disruptions out of the way, more sellers are coming to market and they appear to be ignoring the uncertainties facing potential buyers. Prices are up, but so is choice, and the two are not happy bedfellows in the longer term. This year more than ever the traditional spring seller window is a price sensitive one, if asking prices continue to rise, all but the most popular locations are building themselves up for some of the gains to be lost later in the year”.
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