The number of homes sold after a bidding war jumped between February and March. Indeed, buyers are so far seemingly shrugging off headlines about the cost-of-living crisis and the terrible conflict in Ukraine and are ploughing on with their property purchases.
In March, 39.7% of homes were the subject of bidding wars, which we define as having a sale agreed after receiving an offer from three or more buyers. This is higher than the 39.1% of homes sold after a bidding war in February and only slightly lower than the record 41.7% seen in January.There has been a similar rise in the proportion of homes sold after the fiercest bidding wars. The share of properties where a sale was agreed after five or more offers were put on the table rose from 16.6% in February to 17.1% in March. Again, this is nearing January’s high of 18.1%.
Buyers in Yorkshire and Humberside have been most likely to get into a bidding war when buying a home – so far in 2022, 52% of properties in the region have sold after the seller received three or more offers. Scotland comes next at 51%, although the property market works differently in the country and sealed bids are commonplace.
In the North West of England and the East Midlands, 44% of sales this year have gone to bidding wars, while London and the East of England saw the lowest proportion of homes selling after three or more offers were received, at 34% and 33% respectively.
As you would expect, bidding wars are pushing up the final price for which a property is selling. In March, the offer which was finally accepted came in on average 3.2% higher than the first offer. This is more than the 3.1% difference between first and final offers seen in both January and February and is only slightly below the high of 3.4% recorded in August last year.
The more people bidding on a property, the higher the final selling price. If there is only one buyer, the final offer this year has been only 0.7% higher than the first offer. This difference rises to 4.0% if there are three buyers competing for a property and 6.2% if there are five. If a seller is fortunate enough to have 10 buyers competing to secure a sale, the final offer in 2022 has been an average of 9.9% higher than the first offer.
With the housing market expected to cool as inflation bites and the impact of rising interest rates starts to be felt, sellers will be hoping to capitalise on the current levels of buyer appetite while they can. For buyers struggling to get their hands on a home however, the second half of the year is more likely to bring them some relief.