With Rightmove announcing a national drop of 0.3% in average asking prices in August, some are asking if the steam has been let out of the property market. Yet with the gains we have seen in the last 12 months, is this just a minor bump in the road? Alarm bells normally ring when new homeowners coming to the market for the first time are having to lower their initial asking price when compared to the market as a whole.
So, what is actually happening in the national and local property market to asking prices and the number of properties for sale, and where does that leave Hove homeowners and Hove landlords?
1 in 7.4 homes already on the market today have reduced their asking price in the last two weeks
That means new sellers bringing their property to the market for the first time, are having to curtail their initial asking price to remain competitive. Normally, this should ring alarm bells, particularly when this is the first time this has happened in 2021. Therefore, it’s vital to ‘look under the bonnet’ of the figures and see what, exactly, is happening locally.
Average asking prices for Hove homes are 1% down compared to July
However, that figure hides some interesting anomalies - the average asking price of Hove semi-detached houses is 8% lower than in July (that doesn’t mean they have dropped in value by that much – just the headline asking prices) whilst detached houses have seen the average asking price rise by 3% in the last month.
So, if this is what is happening to Hove asking prices, what about the number of properties for sale. Looking nationally first there are currently just 285,970 properties for sale in the UK, which means 1 in 67 British homeowners are presently on the market – interesting when compared to 2005, it was 1 in 13.5 homeowners on the market.
With such little supply of properties for sale nationally, demand remains robust. Yet the property buyers in the market are being a little more reserved with the offers they are making compared to the Stamp Duty holiday frenzy times seen earlier in the year. They will pay handsomely, and yet top dollar won’t offer the ‘crazy price’ levels some Hove buyers were offering in the spring – hence the recent reduction in asking prices to a more realistic level.
Looking at the movement in the available properties for sale and to rent in Hove over the last few months, an interesting picture arises.
The number of Hove properties for sale (and rent) is still at record lows when compared to the 30-year long term average.
The choice for Hove tenants is limited as well, as many tenants aren’t moving home. With the additional increase in demand from 1 in 10 Hove homeowners choosing to go into rented accommodation (albeit temporarily) Hove landlords with exceptional properties are getting decent rents, as discussed in a recent article I wrote about the level of rents in Hove.
With the current level of Hove properties for sale being around 40% to 50% below the long-term average (depending on the type of Hove property you own), it means when a Hove property is properly priced, given the intense competition, often it comes down to the position of the buyer and not the price they are prepared to pay.
When I say, “position of the buyer”, I mean, do they have a chain, do they have to sell their own property to buy another property?
Many Hove house sellers are selling their home before they buy. Selling before you buy can be a fruitful approach in a fast-moving property market. That does mean your own purchaser will have to demonstrate a certain amount of patience whilst you wait for the right home to come on to the housing market.
However, because it is currently taking on average 19 weeks between sale agreed and exchange of contracts, with mortgage providers and solicitors taking their time due to the backlog, this often allows you to potentially play catch-up if it takes a couple weeks to find the right property for you.
Many home sellers are going even further by selling their Hove home first and then going into transitional rented accommodation. This subsequently puts them in pole position when their forever home comes up for sale as they have no chain. Although this takes a lot of determination and resilience, it does mean you will be in the very best position when the property of your dreams comes up.
The choice they say, as always, is yours!
If you would like a chat about the Hove property market and the best thing for you and your personal circumstances, please call 01273 56 77 66.