Driven by lockdowns and fuelled by recent government incentives, Rightmove has revealed that this is the strongest spring sellers’ market in the past decade.
According to the latest figures released this morning by the portal, the UK is currently seeing the greatest excess of demand oversupply in the past ten years, 34% higher than the same period a year ago, with the heightened demand pushing up the average price of property coming to market by £2,484 this month.
The data shows that there are early signs that more owners are now deciding to market their properties, with sales already agreed for almost two out of three properties on agents’ books.
Rightmove anticipate further price rises during the traditional spring selling season and suggested that "the current excess of buyer demand oversupply is the largest we’ve seen in the last ten years. This could be one of the best ever Easters to sell."
Tim Bannister, Rightmove’s Director of Property Data comments: “Concerns of a cliff edge for the housing market at the end of March have dissipated, partly due to the tax deadline extensions in all of the UK bar Scotland, but also because the already high level of buyer demand caused by the lockdowns has continued to surge since the start of the year.
"This demand will be further boosted from April by the new Government guarantees enabling lenders to bring back 5% deposit mortgages. Whilst it is unfortunately not the perfect time to buy for some people who have been adversely affected by the pandemic, the record buyer demand measured by Rightmove indicates that now is the right time for many.
"Record low-interest rates and the new focus on what your home needs to offer after several lockdowns have led us to the greatest excess of demand oversupply in the last ten years. This strong sellers’ market is good news for those who are looking to put their home on the market as the traditional Easter selling season approaches.
"Blossoming buyer demand coinciding with blossoming gardens should put a spring in the steps of sellers, and more of them coming to market will provide a much-needed increase in the choice of property for the many who are looking to buy.”
The number of buyers enquiring about each property for sale on Rightmove is the highest ever measured. It continues to grow as the traditionally busiest period of the year approaches, and in February was 34% ahead of the same month a year ago, which was itself active and busy after the lifting of the uncertainty around Brexit and the election, and just before the first lockdown froze the market.
The start of the traditional spring home-moving period saw the number of sales agreed for the first week in March up by 12% on the prior year. High levels of buyer demand have a clear correlation with high levels of sales being agreed by estate agents, and this record demand means that almost two out of three properties (62%) currently on agents’ books are now sold subject to contract. However, there are early signs that this supply shortage may now be easing, with more owners deciding to market their properties, spurred by the extension of government incentives and a more tangible roadmap to normality.
New listing numbers are seeing momentum building in their weekly run-rate, and for the first week in March, were only 5% down compared to the prior year after being over 20% down in February.
Bannister continues: “So many sales have been agreed in recent months that we now face a serious shortage of homes available for sale. There are lots of reasons why many home-owners have hesitated to come to market during the first two months of the year, but these do now seem to be dissipating. A recovery in fresh supply gives more choice to prospective buyers, many of whom are also potential sellers, which in turn encourages more of them to come to market.
He concludes: "Greater supply to match the high demand would ease upwards price pressure. Price rises will also be tempered by the tighter lending criteria imposed by the Bank of England upon lenders following the Mortgage Market Review in 2014. Restrictions on borrowers’ income multiples alongside stress testing of future affordability were specifically designed to guard against the destructive booms and busts of the past, limiting buyer borrowing power and preventing excessive price movements.
"The current annual rate of house price increase stands at a historically modest rate of 2.7%, but we stand by our forecast for the year of 4% which we published in December.”