Market Update Jan 2023

Today I thought I'd give you a little market update. Rightmove released their January price index on Monday, and it was probably the most confusing one I've ever seen. Rightmove does have a sneaky habit of putting a positive spin on things, so you have to dig deep to work out the truth of the matter. Still, it gives me a good laugh sometimes!

What's the headline news?

Rightmove was mega excited this week about the post Christmas 'bounce-back', with the number of buyers contacting agents up by 55% compared with the two weeks before Christmas. Well it would be, wouldn't it? Duh! Then they said it was the biggest New Year bounce since 2016. But in their very next sentence they said that the number of enquirers was down by a third compared to this time last year.

Talking to my colleagues, I'm hearing that viewing figures are WAY down, and that house prices need to be really competitive to get any action among the few active buyers. If you're on the market, don't be surprised if it's gone a bit quiet. Use the time for a bit of decluttering and maybe lightening up the decor. Ask your agent for fresh photos if you make any significant changes (and especially if there's a Christmas tree in your photos!)

What's happening with house prices?

When we're looking at house prices, a bit of jargon you'll hear quite often at the moment is that the market is 'hyperlocal'. In other words, there are no clear national or regional trends - everything is a mess! Year on year, prices are up, right across the country - well that isn't surprising after last year's madness, is it? However, price rises have definitely turned turtle, and in some areas, they are now dropping. Seven regions have experienced price rises this month, but four have gone down, so the situation as clear as mud. Most of these movements are tiny, for example prices are less than 1% up in the West Midlands.

But just in case that increase made you excited about the value of your house, simmer down! The only clear price movement is in Scotland, which has experienced a decrease of over 5%. And significantly, average asking prices are £8,720 lower than at their 2022 peak, in October last year. And that's asking prices. Don't forget that sale prices could be a lot lower! It's common for desperate estate agents with low property stocks to overvalue houses to get them on the market. And for desperate sellers to believe them!

Average days to agree a sale have also gone up quite substantially since those heady days when estate agents were selling properties within a week. In England, the West Midlands leads the pack with an average of 48 days. London is the worst at 67 days. And sale to completion times are pretty dire too, leaving plenty of time to lose a sale, or part of your chain, during the process.

So what's the moral of the story?

If you're an estate agent, you'll be worrying about your business. Pipelines are down, and according to Atomic Consultancy, a lot of agents are closing or changing hands for lower than usual prices. You'll see both corporates and independents pushing cards through your letter box or knocking on your door to try to drum up new properties. And of course, sellers will see over-valuations to try to secure your business!

If you're buying? You'll make an estate agent's day by booking a viewing this winter! There are some great properties out there and some bargains to be had, but you need to be in a good position to secure them. Ideally you need to be proceedable (under offer, with a complete chain, or a cash buyer). If you need to sell before you buy, at a minimum you need to get your house on the market and get a mortgage in principle lined up, to demonstrate your commitment before you go out looking for your next home.

By the way, don't be too suspicious about houses which have been on the market a long time - there are many perfectly innocent reasons (e.g. a collapsed chain, a job loss, buyer's health problems).

If you're serious about selling, you need to price competitively. Don't listen to agents who are pricing high to get your business, Listen to the agents who are telling you the truth. And dont forget that if a house is sensibly priced, you are more likely to get asking price offers, your buyer is more likely to be loyal, and they are more likely to get a mortgage without down-valuations.