The share of homes sold following a price reduction has risen from 31% in February 2022 to 49% in February 2023. However, they are running near a ‘normal’ pre-Covid rate given that 47% of homes sold in February 2019 had been reduced, according to Hamptons.
Data provided by the estate agency shows that price reductions fell in five out of Great Britain’s 11 regions over the last month. Wales recorded the biggest fall, where 37% of homes were sold following a price reduction in February, down from 47% in January 2023. Meanwhile the three Southern regions outside of London all saw a rise in price reductions.
Overall, the average seller in England & Wales sold their property last month for 98.9% of their asking price, the same level as February 2019. This marked the fourth consecutive monthly improvement following a dip in October when rates rocketed post-mini Budget. However, average asking to achieved figures remain below their February record of 101% this time last year.
More realistic pricing means that the shift has come from a rise in the share of buyers paying the asking price. Some 24% of homes sold last month achieved their asking price, the same share as February 2022, and up from a low of 21% in December 2022. Meanwhile fewer homes are selling for more than or less than their asking price.
The upward trend in what buyers were prepared to pay has predominantly come from the top end of the market, whereas the lower end seems to have stagnated. In February, the average seller who sold a +£500k home achieved 97.9% of their asking price, up from 97.6% in January. Whereas a homes sold for less than £500k achieved 99.1%, the same as the previous month. This reflects how buyers’ budgets at the lower end of the market have been most stretched.
On a geographical basis, whilst it’s suburban and small-town markets that cooled the quickest from their peaks last year, these areas are now showing the bigger improvements. Pricing in suburban or small-town markets remains the most robust where sellers achieved 99.1% of their asking price on average in February, compared to 98.6% in cities where affordability tends to be most stretched.
Hamptons’ data also reveals that the average home sold in Great Britain in February came onto the market 64 days previous. This makes it the slowest February to sell a home since 2013.
However, much of this is a hangover from the market slowdown late last year given that 55% of homes sold in February were bought onto the market before the new year. Whereas last year, when time to sell fell to a record low in February, just 40% had come onto the market before the new year since homes were selling much quicker in general.
Aneisha Beveridge, head of research at Hamptons, said: “With the spring sales season fast approaching, the market appears to have stabilised. Whilst there were further small signs of improvement in most housing market metrics between January and February, the rate of improvement has slowed.
“The cash-rich top of the market seems to be holding up best. However, it’s here that sellers continue to hold out for the right price, which means that these larger homes are still taking much longer to sell than usual. Overall, while transactions remain slim on the ground, prices remain sticky.”
Typically, the number of days it takes to sell is seasonal and we often see a big decrease between January and February following the Christmas lull. But interestingly, time to sell didn’t decrease as much as we would usually expect.
On average, time to sell has fallen by around 40% between January and February in previous years. However, this year, time to sell only fell 17% (or 13 days) over the same period. This is a product of the market’s slowdown towards the end of last year, with more of those homes remaining on the market for longer.
However, one-bed homes have bucked the trend. Generally, the larger the home the longer it is taken to sell. This is partly a reflection of top-end sellers’ willingness to wait the market out given they don’t need to sell. However, at an average of 64 days, it’s two days quicker to sell a one-bed home than it was in February 2022.
These ‘post mini-Budget’ effects will likely continue to drop out of the picture in the coming months. Meaning that we expect average time to sell numbers to continue falling in the months to come.