Almost three-quarters of real estate agents saw most of their November property sales agreed below asking price, according to research from an industry representative body.
The report from NAEA Propertymark, a membership organization for estate agents, says 72% of branches made the majority of their sales last month below the level the customer was looking for. This compares to a low of 15% in March and a pre-pandemic average of 78%.
Further evidence that the housing market has slowed sharply, the report says competition has fallen by more than a third, from a peak of 11 new buyers for every new property entrusted to a member branch, to just seven.
This contrasts sharply with the booming market seen as recently as the summer, when buyers were caught up in bidding wars.
The number of new buyers signing up per member branch fell again to 52 in November from a high of 86 in August. The average number of visits per property continued to decline, to 2.6. New instructions fell to an average of eight per member branch, while the average number of properties available for purchase per branch increased slightly to 33 – from a pre-pandemic average for November 38.
The average number of agreed sales per agency fell to six in November from 10 in September.
There has been good news for tenants, who have seen rents soar to record highs, according to the Rightmove website. The number of agents reporting higher rents fell below 50% for the first time since February 2021, to 49% from a high of 82% in July, Propertymark said. The remaining 51% said rents had fallen or remained unchanged month over month.
A shortage of rentals has pushed up the amount tenants have been forced to pay in recent months, but in November the number of properties available to rent rose slightly, to an average of 11 per branch from nine the previous month. Competition between tenants has also eased: an average of 77 new applicants were registered per member branch, compared to 147 in September, although this figure is still above the pre-pandemic average.
The number of tenants has increased as some would-be buyers are renting in the hope that mortgage rates will drop in the new year, while more people are living alone with the increase in working from home.
Nathan Emerson, Managing Director of Propertymark, said: ‘The sales market is firmly back in the hands of buyers who have been on the back foot for 18 months. More goods are available, but the competition among those looking has cooled considerably. For those who are motivated to sell, good, solid buyers are always important.
“When it comes to rentals, we are starting to see a drop in demand; the ripple effect is that fewer agents see their rents go up. It is possible that prices have peaked, and the owners are well aware that further increases will not necessarily be achieved. It’s not all good news, however, as homeowner costs continue to rise, leaving many facing the very real possibility of incurring a loss.