Areas of the South that were hardest hit when mortgage rates peaked last year have seen sales bounce back to above both 2023 and 2019 levels. Even though mortgage rates have edged upwards given that the financial markets have rolled back slightly on their rate-cut expectations, the number of homes going under offer continues to run 10-20% above last year’s levels across the country.
DAYS TO SELL
Hamptons’ latest market metrics show that the average home in Great Britain that went under offer in April had been on the market for 50 days. This is one day longer than the same time last year, partly reflecting the hangover from last year’s slowdown given that 27% of homes that sold last month came onto the market in 2023.
While the average time it takes to sell rose year-on-year in the Midlands and the North, it fell in the South of England. Consequently, the time to sell gap has narrowed. It’s now eight days slower to sell in the South of England than it is in the North, half the 16-day gap recorded last year. The South of England includes London, the East of England, South East and South West.
The South West saw the biggest annual fall in the number of days it took to sell a property with the average home going under offer six days quicker than last year. It was closely followed by the South East and London.
One in twenty homes that came onto the market last month across Great Britain received an offer in the first week of marketing, whether it was accepted or not. Four of the five regions where homes received offers more quickly than last year were in the South of England, suggesting that prospective buyers are a little less cautious than last year when mortgage rates were close to peaking.
ACHIEVED PRICES
Across England and Wales, 27% of homes sold above their final asking price in April, the same level as last year. However, there’s been a significant jump in London and the South where 25% of homes sold above their asking price last month, 2% more than in April 2023. It’s here that lower mortgage rates this year have helped unlock more moves. Conversely, 2% fewer homes in the Midlands and the North, where affordability has been less squeezed, sold above their asking price compared to the same time last year.
Sellers in the South achieved 98.9% of their final asking price on average in April, 0.5% more than last year. However, the ratio of asking to achieved prices for sellers in the Midlands only ticked up 0.2% year-on-year, with vendors in the North achieving 0.2% less than last year.
For the first time since 2016, sellers in London are achieving the same proportion of their asking price as those across England & Wales. This reverses a trend seen over the last eight years when London vendors have been selling at a greater discount than elsewhere.
PRICE REDUCTIONS
Price reductions fell to an 18-month low in April. Forty-four percent of homes in England and Wales were sold following a price reduction last month, which is the lowest figure since October 2022. This means that after peaking at 56% in October 2023 when high mortgage rates took their toll, price reductions are nearing their pre-Covid (2016-2020) average when 42% of sales took place following an asking price reduction.
The South West and Wales were the only regions where price reductions didn’t decline. Wales is also the only region where over half of all homes sold after being reduced.
OUTLOOK
Official house price indices based on completed sales are still recording small price falls across much of the South. However, we expect them to show a return to neutral or even positive territory over the coming months. The sales being agreed today are only likely to feature in the official ONS house price index in three to four month’s time.
But a big bounce back in house prices this year still seems unlikely. High mortgage rates will continue to firmly anchor prices across the South of England in particular. While last year saw transaction volumes hit harder than prices, we’re likely to see the opposite this year. 2024 will see the number of people moving home recover much faster than prices.
