Over the past seven years buyers have got used to having the upper hand. Those with cash and no need of a mortgage demanded and got big discounts, writes Sharon Dale...
Now, it looks as though the days of knock-down prices could soon be over. Many estate agents are reporting a lack of supply and a post-election surge in activity. This imbalance is creating a sellers’ market, especially in sought-after areas.
The latest Rightmove index shows that new seller asking prices rose three per cent in June, bringing the average price of a property coming to market to £294,351.
In Yorkshire, the increase was 2.2 per cent and the average asking price is £173,844. The county was the North’s star performer. The North West saw a 1.2 per cent rise and the North East a 0.2 per cent fall.
Miles Shipside, Rightmove director and housing market analyst, says: “Some buyers had been holding back in the weeks before the election, leading to some sellers suffering an unseasonal price standstill in the late spring. “Now, the unexpected election outcome has caused a strong rebound, prompting an upturn in buyer demand and helping new seller asking prices to hit their highest ever levels.”
He adds that while buyers have been quick to come back to the market, potential sellers have been slower with the result that demand is not being matched by suitable supply in many parts of the country.
Rightmove had its busiest month ever in May with 115 million visits to the website, exceeding May 2014 by 22 per cent. In addition, the busiest ever single day for visits was recorded on Tuesday, May 19 , as home hunters took less than two weeks after the election to get back into their searching stride.
However, the number of properties coming to market was down 8.5 per cent on the same period a year ago.
The top end, £2m plus market bucked the supply shortage trend with an 86 per cent leap in new to market properties in the 30 days after the election, compared to the previous 30 days.
“That will be of no comfort or use to the mass market which needs more choice in the right locations at more affordable prices,” says Miles Shipside.
“It all seems set for an active second half housing market in 2015, barring any external shocks to the economy.
“Yet, it remains to be seen whether stretched buyer affordability can reach sellers post-poll pricing.”
He is urging the government to urgently deliver more new-build homes, to stop asking prices being pushed up further.
A report from property portal Zoopla this week confirms that would-be buyers are finding haggling over house prices increasingly difficult.
It says that the average reduction is just 6.05 per cent off the original asking price, which equals the lowest cut in the last five years.
However, at the moment, around a third of properties for sale on Zoopla’s website have had their price reduced at least once since originally being listed.
The top ten areas with the highest percentage of properties with reduced asking prices are all in the north of England.
More than two-fifths of all properties listed in Rotherham, Preston and Barnsley have been discounted.
The largest reductions are on offer Blackpool, Manchester and Bradford. London features thanks to its high values, which bring the average discount to £75,000.
At the top end of the national market, more than a fifth of properties valued over £1m have been reduced since being advertised for sale. The average discount is just over £185,000.
Lawrence Hall of Zoopla says: “Buyers may be disheartened by the decrease in the typical discounts on offer but can take cheer from the fact that almost a third of houses listed below their original asking price. This means that despite ever-increasing house prices, there is still room for some good, old-fashioned negotiating. On the flip side, vendors can be pretty confident of achieving close to their initial asking price.”