According to Rightmove's November House Price Index, the price of property coming to market has fallen by 1.7% (-£4,542) as sellers compete on price in bid to stand out during quieter winter months.
November has recorded a drop in new seller asking prices in eight out of the last ten years, however the monthly fall is the smallest for five years and the annual rate of increase climbing 8.5% (+£20,890).
Following the most active year for transaction volumes since 2007, average stock levels per estate agency branch are at historically low levels, with an average of 60 properties for sale. This is the lowest number ever recorded at this time of year, with lack of property choice having helped fuel this year’s upwards price pressure.
The volume of property coming to market is also slowing down, further limiting supply, and this month sees new listings down 1% on the same period last year and 15% on last month. While prices are falling in the run-up to Christmas, there are still signs of supply shortages in some parts of the country compared to buyer demand which could push prices up again in 2015.
Miles Shipside, Rightmove director and housing market analyst, comments:
“Selling is more difficult than it was earlier in the year, though the mini-boom experienced by much of the country has hit the pause rather than the stop button.
"Underlying demand remains strong but has been muted by higher prices stretching affordability at the same time as the ability to borrow more to fund those higher prices has been curtailed by tighter mortgage lending criteria. After an active year it’s a sensible pause and, with the winter months approaching, sellers are hoping a cheaper asking price may spur those scarcer buyers into action.
"Given the lowest ever level of property for sale at this time of year and the prospect of higher prices in popular locations in 2015, some buyers may look to start their New Year property search as early as Christmas Day itself.”
Eddie Ellis, Director of JP & Brimelow in Chorlton, Manchester, comments:
“Although stock is down on last year in Chorlton, the number of sales is up, especially family homes. We sold eight houses in the first three days back after New Year in 2014 so there are clearly motivated movers who are ready to jump into action post-Christmas."
Neil Smith, Branch Manager at Robinson Jackson in Bexleyheath comments:
“At Robinson Jackson Bexleyheath buyer level activity has slightly slowed down, however we are still experiencing high demand for 3 bedroom family homes, and we are still finding a lack of stock coming to the market. Being able to buy a family home for £350,000 to £400,000 while still being within easy distance to Central London has made Bexleyheath an appealing place for second steppers looking for more space.”
The latest Residential Market Survey from the Royal Institute of Chartered Surveyors has found that RICS members across much of the country expect transactions levels to increase as a result of the stamp duty reforms.
Members expected an average rise in volumes of somewhere between two and five per cent, but in central London, the feedback was more mixed, with members on balance anticipating a modest decline in activity.
The survey stated that the stamp duty policy development has "the potential to trigger a material shift in market sentiment and functioning".