Residential properties across Great Britain are taking longer to sell than they were last year, but there are signs that housing market conditions are improving.
The average home sold in March came onto the market 48 days ago, meaning it is taking 22 days longer than the same time last year when time to sell was at a record low.
However, well-priced and future-proofed homes are still selling at a similar pace to last year, particularly at the top-end of the market where buyers tend to be cash-rich and are likely to stay in that home for a longer period of time, according to the latest data from Hamptons, part of the Countrywide Group.
Of all £1m+ priced homes that came onto the market last month, one in ten sold within a week. This is up from 8% in March 2022 and the second-highest proportion recorded of any March since our records began in 2009.
Across Great Britain, 11% of March’s new instructions had an offer accepted within a week, slightly down from 12% in March 2022.
As mortgage rates have increased, so too have the number of homes being sold following a price reduction. The figures peaked in February, when 50% of homes sold in Great Britain were sold following a price reduction.
But as as the year progresses, a rising share of homes being sold have come onto the market this year, rather than last. As a result, the proportion of homes sold following a price reduction decreased a little in March to 48%, and we expect it to continue falling in the coming months as the market continues to stabilise and new instructions are priced accordingly.
Some 40% of homes sold last month came onto the market in 2022, down from 55% in February.
In terms of a asking prices, Hamptons report that they remain sticky across England & Wales, with the average seller achieving 98.8% of their asking price last month, down from a near-record of 101% in March 2022. However, the continued lack of homes coming onto the market means that sellers are still achieving closer to their asking price than in any March pre-2021.
While homes that sell quickly are more likely to achieve their asking price, those that came onto the market in March and sold in the same month achieved an average of 99.9% of their asking price. This is still higher than 2019, when sellers that sold within a month achieved 99% of their asking price.
Meanwhile, homes that came onto the market in 2022 and sold last month, achieved 98.4% of their asking price. Again, this figure is higher than 2019 when sellers took equally as long to sell and suggests that vendors remain determined to achieve close to their asking price, despite the market slowdown.
Cash buyers continue to negotiate harder and in March achieved a 1.1% discount on average. Whereas mortgaged buyers paid 99.1% of the asking price in England and Wales last month, up from 98.2% in March 2019.
First-time buyers usually fall into this latter group. While movers and investors reduced what they were willing to spend month-on-month, lower mortgage rates and the desire to make their first move meant that the average first-time buyer paid 99.5% of the asking price in March, up from a low of 99% in December 2022.
With 10% fewer homes coming onto the market in March than the same time in 2019, and 2% more buyers registering to buy, bidding wars remain common. Our latest data shows that 32% of homes sold in Great Britain in March had three or more offers from competing buyers, up from 29% in March 2019.
However, there were fewer bidding wars than last year when 43% of homes sold in March 2022 were sold with three or more competing offers.
But studio and one-bedroom homes have bucked the trend – 29% of these properties sold in March with three or more offers, up from 27% in March 2022. These homes are often bought by first-time buyers or investors, with the former group remaining active in the market.
Although three-bedroom homes still remain the most likely to be sold with competing offers, they’ve seen the biggest year-on-year decline in competition – 33% of three-bedroom properties sold with three or more offers in March 2023, 16% lower than March 2022.
Aneisha Beveridge, head of research at Hamptons, said: “The impact of higher interest rates continues to bear down on the market. However new buyer numbers have recovered to 2019 levels, suggesting that the second half of 2023 is likely to be stronger than the first. But the market’s ability to pick up pace later in the year will depend on how quickly inflation drops out of the picture and whether the Bank of England can begin cutting rates.
“Sellers are still holding out for top prices on the back of limited numbers of new homes coming onto the market. While the total number of homes for sale has steadily risen, this has been driven by the lengthening time it’s been taking to sell each home rather than the number of homes coming onto the market. The number of new homes coming on to the market in March stands 13% below the same month in 2019.”