In the ever-evolving world of property, a single-digit annual increase in the number of new homes coming onto the market has not been enough to push stock levels to the point where the scales are tipped in favour of buyers.
While more buyers are putting in cheeky offers than a year ago, the majority are unsuccessful. Rather, sellers are sticking to their guns and are holding out for a figure which is closer to their asking price than in any April pre-2021.
This all points towards a major price correction looking increasingly unlikely in 2023. Rather, we expect activity to track 2019 levels throughout the remainder of the year as the market treads a more sustainable path.
Here, we explore the latest metrics that show how different parts of the market are faring:
Last month, nearly two in five offers (39%) were made at least 5% under the asking price. While this is up from 22% a year ago as more buyers try to haggle, this figure is lower than pre-Covid times when 40% of April 2019’s prospective buyers were hoping for the same discount.
A rising proportion of buyers have also tried their luck by offering more than 10% below the asking price. They made up one in five (20%) of all offers last month, up from 12% this time last year. However, only 7% of these discounted offers proved successful and were accepted as sellers continued to hold firm. Meanwhile 12% of offers made at least 5% below the asking price were accepted last month.
The average home sold in England & Wales in April achieved 99.0% of its asking price, the third strongest figure recorded in any April since 2009. While this is down year-on-year, sellers continue to achieve closer to their asking price than they did pre-Covid. Back in April 2019 the average seller sold their home for 98.1% of its asking price.
Consequently, 26% of homes sold in England & Wales last month sold above their asking price, the highest share since October 2022 and up from 17% in April 2019.
Sellers bringing properties to the market this year continue to achieve close to their asking price. Of those who listed their home for sale this year, 31% sold above the asking price compared to 23% who listed in 2022 but sold in 2023. Before Covid, between 2015-2019, an average of 18% of sellers who listed their homes during the first four months of the year went on to achieve more than their asking price.
The uptick in asking to achieved prices has been driven by first-time buyers and investors. Last month the average investor paid 100.1% of the asking price for a property in England & Wales. This makes them the only group who paid over the asking price on average which is a rare occurrence. Meanwhile as lower mortgage rates boosted their buying power, the average first-time buyer paid 99.7% of the asking price in April, up from 99.3% in March.
On a regional basis, the three Northern regions saw the biggest uptick in achieved prices. Here, the average seller achieved 99.9% of their asking price in April, up from 99.2% in March. Meanwhile affordability constraints in the South meant that asking to achieved prices only ticked up by 0.1% month-on-month to average 98.6% in April. Wales, the region that’s seen some of the strongest price growth over the last few years, saw asking to achieved figures slip by 0.4% month-on-month.
While the average home in Great Britain took 49 days to sell in April, up from 28 days in April 2022 and 40 days in April 2023, generally this year’s sellers have found a buyer quite quickly. Rather, it’s homes that come onto the market last year during the economic uncertainty that continue to act as a drag on time to sell numbers.
Of all the homes that came onto the market so far this year, 23% sold within two weeks, the same proportion as in 2019. This means that sellers are as likely to sell their home within 14 days as they were in April 2019. However, homes are still taking longer to sell than the fast-paced market last year when a peak of 41% of homes that came onto the market in April 2021 sold within two weeks.
£1m+ homes have bucked the trend. Last month, a record one in four £1m+ homes that came onto the market sold within two weeks, up from 23% in April 2022 and 9% in April 2019. The average £1m+ home that sold last month came onto the market 51 days previous, 42 days quicker than the same time in 2019. Cash has played an increasingly important role in this sector of the market and has insulated buyers from interest rate rises, the like of which haven’t been seen for nearly two decades.
Last month, 48% of homes sold following a +£1 price reduction in England and Wales, up from 27% in April 2022 and 44% in April 2019. However, nearly a third (32%) of these homes came onto the market before the New Year against a different backdrop.
Sellers who listed their home in 2023 have been less likely to reduce their asking price than pre-Covid. 31% of all homes that came onto the market this year sold following a price reduction, lower than the 43% of homes listed and sold within the first four months of 2019.
There’s a clear North-South divide for price reductions. While homes in the South are still more likely to be sold following a price cut, the increase in price reductions over the last month has been driven by Northern regions.
The share of homes sold following a price reduction in the North East, North West and Yorkshire & the Humber rose to 45% in April, up from 41% in March. Whereas 50% of homes in the four Southern regions last month were sold following a +£1 price reduction, slightly down from 51% in March.