Recap of the Year So Far
Reflecting on the year, our 2023 started on an expectedly quiet note, but the usual flurry of activity in the spring market was delayed due to economic uncertainty and less-than-ideal weather. However, things began to change for the better in mid-May when the sun graced us with its presence. As if responding to the newfound warmth, our office phones started lighting up.
Buyers eager to view, and sellers eager to list flooded our phone lines. At one point in June, we found ourselves handling a remarkable 12 new instructions in the space of two weeks. It’s no coincidence that this surge in activity coincided with the improvement in weather.
July and August brought its usual predictably quieter period due to the summer holidays, but there was still an air of positivity in the market, surpassing the early spring activity levels. Now as autumn is here, it’s an opportune moment to examine the latest trends and make sense of the present scenario.
Where We Stand Today
As we venture into the autumn selling season, one noticeable trend is the abundance of housing stock. In fact, our stock levels are the highest they’ve been with us since before the Covid19 pandemic. This might suggest growing interest in selling properties, but it also hints at a somewhat slower market pace.
However, it’s crucial to emphasize that the market is far from dormant. We are consistently closing deals, and desirable properties that are priced to sell are still going relatively quickly. While it’s undeniable that the market has slowed somewhat, it’s essential to remember that this is part of a natural ebb and flow in the property market.
Viewing requests, for instance are taking a bit longer come in compared to 2020-21. Properties are also spending more time on the market compared to 18 months ago. But this merely highlights the need for both sellers and buyers to adapt to the evolving landscape.
Factors Affecting the Autumn Property Market in Ystradgynlais
Understanding the perspective of potential buyers in the current property market is crucial for comprehending the dynamics at play. Online forums and word-of-mouth at viewings offer a valuable window into the sentiments, concerns, and expectations of buyers, especially in the context of the property landscape in the UK.
The Plight of First-Time Buyers
One of the market’s key dynamics is the challenges faced by first-time buyers. As property demand decreases, the instances of properties being snapped up within the first week of marketing are fewer. However, now that they have time to breathe before making a decision, many first-time buyers now find themselves contending with the highest interest rates in recent memory. The Bank of England’s interest rate increases have resulted in mortgage repayments soaring, and have cast a cloud of uncertainty over the housing market, causing many prospective buyers to wait for more stable price trends.
As fewer first-time buyers can afford to enter the market, those wishing to sell their property and move onward consequently encounter difficulties. Many sellers who have found their next home are stuck in limbo being unable to proceed with a purchase due to a lack of interest in their own property. This then ripples all the way up the chain.
Nonetheless, this situation isn’t all doom and gloom. The market is undergoing a natural rebalancing act. Some lenders have taken steps to reduce interest rates, which is good news for fresh first-time buyers looking for opportunities, and for those they wish to purchase from.
Waiting For a Sale – Chain Building
With properties taking longer to sell, what’s becoming more common is offers accepted pending sale – whereby buyers who have not sold yet, agree to a purchase with the intention of proceeding with the sale as soon as they accept an offer. Whilst during the post-lockdown period, properties were selling so quickly it was often pointless offering viewings to those unable to proceed, in this market, it’s not a bad idea to allow viewings for those who haven’t secured a sale as there is potential to build chains to help multiple seller/buyers towards their goals.
Boom Time Pricing
The phenomenon of sellers continuing to price properties as if it’s 2020-2021 is a recurrent theme in the conversations of buyers. This period is etched in the collective memory as a time when the property market experienced a remarkable surge, triggered in part by the circumstances surrounding the Covid-19 pandemic.
During this time, various factors converged to create a perfect storm for property buyers. The desire for more spacious and comfortable living environments, often driven by lockdowns and remote work, led to increased demand. At the same time, record-low interest rates and the stamp-duty holiday provided an incentive for many to make their move into home ownership or to upgrade their existing properties. But with a housing supply that could not keep up with demand, these conditions resulted in a remarkable seller’s market, with homes often receiving multiple offers and achieving prices that sometimes exceeded expectations, often in the first week of marketing.
But the market has clearly changed, and now, this misalignment between buyer expectations and seller pricing can create a sense of frustration.
Price Sensitivity
Whilst in the boom time, buyers were scrambling to secure a property from the few that were available, in this current market, with more choice, buyers are focussed on affordability and are willing to make compromises if the pricing is right.
Reports from across the UK reveal a noticeable increase in property price reductions this year and indeed, gradual reductions in £10k increments are common across our local market. With a total of 42 price reductions since the beginning of September in SA9 of up to £110k (according to Zoopla), it shows that properties are still some way from hitting the market at a price many buyers in the current market are willing or able to pay.
Sellers who switch to a different agent because their property hasn’t sold and re-list at the same price, may find their property sitting on the market for even longer without interest.
The Influence of National Media on Buyers
The media can have a significant impact on public perception and behaviour, including property buyers. If there is widespread coverage and speculation about potential property price declines, it can create a sense of uncertainty and caution among buyers. They may be more inclined to make lower offers to protect themselves from future price drops. But it’s important to understand that the UK housing market does not move as a whole but is made up of many individual markets that can vary greatly depending on the region and local factors. We’ve seen that whilst parts of the country (notably in south west England, and south east) have seen falls of up to 8%, our market here in Ystradgynlais and SA9 remains relatively stable showing less than 1% change in prices.
Whilst buyers may be tempted to cite national media coverage of house prices falling when making an offer, generally offers more than 10% below the asking price are routinely being rejected by sellers.
The Competition with New-Builds in SA9
Another interesting dynamic to consider in Ystradgynlais and SA9 is the competition sellers face from new housing developments. As of now, four new developments are underway in our area. This introduces new choices for potential buyers, who are now weighing the pros and cons of existing homes against newly constructed properties.
Sellers should factor in this competition when setting their prices. The amenities, location, and unique features of existing homes must be highlighted to make them stand out in the current landscape.
The Key Factor For Buyers and Sellers – Price
As we come towards the end of 2023, the memories of the 2020-2021 period still linger but must be tempered by an acknowledgment of the evolving market dynamics. The transition from a seller’s market to a more balanced or buyer-friendly market is characterised by shifting conditions. Interest rates have risen, affecting the affordability of mortgages. Economic uncertainties and external factors can also influence buyer decisions, and of course the cost-of-living situation is at the forefront of everyone’s minds. Buyers often express the challenge of navigating a market where seller expectations seem rooted in the past. They find themselves encountering properties priced at levels that were common during the 2020-2021 boom, despite the prevailing shift in market dynamics.
Pricing Right from the Start
Whilst there may be a yearning for the halcyon days of 2020-2021, the market has undergone a transformation. Sellers must acknowledge that setting a competitive and realistic asking price from the start is critical for attracting interest and ultimately securing a sale.
As a seller, it might be tempting to list your property at a higher price than your agent recommends, with the intention of accepting an offer below the asking price. However, it’s essential to approach this strategy cautiously. By overpricing your property, you risk it languishing on the market without much interest. In the current climate, where there is a wider array of choices available to buyers than in recent memory, the market has become fiercely competitive.
Moving Forward
No one can really predict what the property market is going to do, but as we head through autumn and into winter, at Roberts Homes, we stand ready to guide you through this exciting journey. The autumn property market is filled with potential, and we’re here to help you find your perfect property or assist you in selling your current home in this interesting local market. Don’t hesitate to reach out!
