The stats revealed that the average price of property coming to market is up 0.7% this month, similar to the 0.6% rise at this time a year ago with a virtually identical number of properties coming to market. However both years are well behind the average monthly rise of 1.9% seen at this time of year in the faster-rising markets from 2013 to 2016.
Additionally, Rightmove says buyers are "still being very choosy", as shown by the number of sales agreed in the last quarter of 2017 being lower than a year ago in all regions.
The boost given to first-time buyers by the abolition of stamp duty means that properties in that sector are facing higher demand and consequently more upwards price pressure, especially if supply is limited. Their typical target sector of two bedrooms and fewer has seen the biggest rise of 1.1% in the last month, ahead of second-stepper properties at 0.4% and top of the ladder at 0.8%.
Overall, supply remains tight, with average overall stock per estate agency branch holding steady at 42 properties, the same as a year ago.
Miles Shipside, Rightmove director and housing market analyst, commented: “All regions are currently selling at a slower rate than a year ago, indicating choosier buyers. The total number of sales agreed was 5.5% down in the last quarter of 2017 compared with the same period in 2016. Setting tempting asking prices and then quickly reducing them if there is little initial interest will be key to turning this promising level of buyer activity into actual sales, especially in the less active sectors and locations of the UK.
There is no sign so far of any rush to come to market and try to sell, with the number of new-to-the-market properties holding steady against the same period a year ago at around 63,000. With no increase in fresh supply, and an overall average of 40% of properties on agents’ books already sold subject to contract, would-be buyers in some sectors and locations of the UK are seeing less choice to tempt them, fuelling some localised price rises. While potential buyers are still busy looking, they are looking for good value and the right property. Price rises have had a good run and the return of the days of optimistic pricing is consequently some years away and contingent upon earnings increasing and interest rates remaining low.
Those selling to ‘quick-off-the-block stamp-duty-saving first-time buyers’ are set to have a busier first quarter than those trying to sell in other sectors. We expect that many first-time buyers will act fast to satisfy their appetite to get onto the housing ladder and secure their property at today’s prices, before any stamp duty savings are eaten up by rising property prices.”
Graham Davidson, managing director of buy to let specialist, Sequre Property Investment, comments: “Rightmove’s latest report clearly demonstrates the health of the property sector right now. Every region excluding Greater London has experienced anything from 1.1% to 4.7% annual growth which is fantastic considering the economic challenges we’ve had throughout 2017.
Whilst Yorkshire, East and West Midlands have all benefited from a rise in asking prices, we still believe the North West will continue to be the best region for buy to let investors. Low property prices and high rental demand in key cities will remain as the key driving force, in addition to capital growth prospects and high rental yields achieved. Those who have been chasing capital growth in the south will continue to suffer due to unsustainable prices and low performing yields.”
Ged McPartlin, Director at Ascend Properties, comments: “It’s common to see a slight market slowdown during the quieter months, evident in the figures for December, however the annual figures paint a great picture for the North West property market. We need to remember that Rightmove’s data is based on asking prices and therefore will reveal more of a vendor behaviour than a buyers. What it does show is that prices are rising for each region except Greater London – a fact which we believe is mainly down to the shortage of stock. This is particularly evident in key northern cities like Manchester and Liverpool where there is just not enough stock to satisfy potential buyers. Whilst the stamp duty abolishment for first time buyers has created a flurry of activity already, the exercise is pretty useless unless there are actually homes for people to buy.”
Andy Frankish, Director of Mortgage Advice Bureau, added: "The Stamp Duty exemption scheme for first-time buyers has already seen entry level properties attract a premium; an outcome which many predicted when the announced was made in November.
In other sectors, such as second steppers and higher value properties, whilst month on month and year on year growth in many areas is subdued, that’s a far more positive situation than many had feared, which was that we’d start the new year with a ‘bearish’ market that would see growth overall slide into reverse gear. So whilst asking prices haven’t increased significantly in January, frankly the situation is better in most regions than many had hoped. That said, London is still seeing prices cooling, which is a continuation of the trend which has been brewing since last year.
What the report does indicate in no uncertain terms is that buyers are becoming more selective, which means that both price and presentation for would-be sellers remains key to ensure that their property is desirable and realistically valued. Having said that, the ongoing lack of stock in popular areas will possibly lead to the potential for prices to galvanise where there isn’t enough stock once the market gets into it’s full stride within the next few weeks. Whether that will be further fuelled by competition between first-time buyers remains to be seen, and it would be shame if the savings that they were able to make in SDLT were instead eaten up by having to pay an increased price to get on the ladder, which probably wasn’t what the Chancellor had in mind.
All in all then, whilst not a racing start to 2018, the market would appear to have maintained a steady equilibrium which is in many respects, a significant outcome given current economic and political headwinds."