House sales drop in summer property slump: Frustrated sellers urged to cut price now, not wait until September
Higher mortgage rates and political uncertainty have led to a sharper-than-usual summer slowdown in the property market, according to the website Zoopla.
The number of sales agreed fell by 9 per cent in July compared to the same time last year, with the North East being the only region to see sales rise.
Richard Donnell, executive director at Zoopla, said that the World Cup had also distracted would-be buyers from getting out and viewing homes.
‘Average mortgage rates started the year at 4 per cent and are currently around 4.75 per cent adding more then £1,500 a year to the cost of buying an average priced home,’ he said.
‘Together with the political uncertainty of a new Prime Minister and the distraction of the World Cup, demand to buy homes has slowed.’
House price growth has been dampened by the lack of sales, as more properties on the market means less competition and fewer bidding wars.
Summer slump: Mortgage rates and political uncertainty have created a sharper-than-usual summer slowdown, according to Zoopla, with sales agreed down 9% year-on-year
The average home is worth only 1.3 per cent or £3,400 more than it was a year ago and now sits at £272,800.
In some regions, prices have fallen. The typical London home has dropped by £3,270 year-on-year according to Zoopla while properties in the South East are down £1,480.
A typical home in Northern Ireland has gone up £9,610 over the past 12 months, however, and in the North West prices have risen by £7,100.
Sellers should drop their prices now
Sales typically jump in September, as buyers return from holidays and many aim to be in new properties by Christmas.
This is when many sellers decide to cut the price of their home in order to engineer a sale. The share of sellers cutting their asking price by 5 per cent or more consistently peaks in September, according to Zoopla.
But Donnell says those hoping to sell their home should consider cutting the price now, to get ahead of other sellers who might wait until the beginning of autumn.
He says that seller whose homes are still sitting at their spring asking price in October risk missing this window of activity.
Almost a third of homes for sale today were listed between April and June and remain unsold with no price cut.
‘Sellers should speak to a local agent who knows what’s actually happening on their own patch, rather than relying on the national picture,’ says Donnell.
‘For anyone who doesn’t need to move, it’s entirely reasonable to wait and see how things settle.
‘But for those with a genuine need to sell, our data shows September is when the market typically turns, and pricing to meet buyers now is what tends to get deals done, rather than waiting to see what autumn brings.’
Warrington is easiest place to sell
Around three-quarters of local markets are registering fewer sales than a year ago over the past three months, according to Zoopla.
Behind the regional averages, some of these markets stand out from both the national and their own region’s trend.
Warrington, Hull and Dundee are clear housing market hotspots, with a sustained increase in sales agreed and higher price growth than a year ago.
Prices in Warrington are up 3 per cent on last year.
At the other end of the scale, Bath, Oxford and Harrow have all seen fewer sales and have moved from positive price growth 12 months ago to flat or negative levels now.
Harrow in North West London was already flagged as a market under pressure in April, when homes there were taking 65 per cent longer to sell than a year before.
This month’s data shows that weakness has now fed through into prices as well, with the average property value falling 0.8 per cent over the past 12 months.
