Agents have noted this week the continued high volume of 1 and 2 bedroom flats being listed for sale. Many of these properties have come onto the market as the stamp duty holiday has encouraged a rush to sell property with a view to upsize to a larger home with some outside space.
With so much choice, price sensitivity in this area of the market is high. Our data shows that stock levels of flats are only -15% lower than six months ago, whereas stock of houses has fallen -42% over the same period.
The greater market strength in houses can also be seen in the sales rate. 70% of houses that come to market are selling, whereas only 51% of flats are finding a buyer.
If you are considering selling a flat now you will have to be very price competitive in order to generate decent interest, the great current headlines of lack of stock and climbing prices does not apply to flat sales.
We are also noticing high levels of pent up demand as the supply of larger properties, particularly in rural areas is low. This is often being caused by vendors unable to secure an onward purchase.
If you are considering selling a large rural property you may want to list it now to take advantage of this pent up demand and perhaps look to rent before you make your next move. In a market where there is competition amongst buyers it is to your advantage to be in a position where you aren’t reliant on the sale of a property. To be able to offer a vendor more certainty of a sale and flexibility on timing puts you in an advantageous position.
The FT claimed in May 7: “Boom in off-market property sales” that 37,070 properties changed hands “off-market” in the first quarter, the highest ever. This is approximately 10% of the UK wide sales in 1Q. Hamptons suggested 20% of sales in 1Q in London were off-market, up from 11% in 2019. This sounds high to us and likely applies to the higher end of the London market.
Another article from the FT, May 7: “Buy-to-let landlords spread their bets away from London” suggested that whilst prices rose +78% in London in the 10 years from 2007, in the North East of England they fell -9% over the same period. This story has now changed, with London prices stagnating whilst gains and rents outside the capital have accelerated.
Paragon a buy-let-lender noted that landlords have increasingly been searching for yield, driving the popularity of towns in the Midlands and the North. In the past 12 months the North East and West Midlands have been “particularly buoyant”.
Property prices have accelerated over +10% in the North West and East Midlands over the last 12 months and HMO properties, expected to be a casualty of the coronavirus, are now delivering the highest yields of all property types.
Retirement homes are notoriously difficult to sell. Largely because the market is relatively small with a limited pool of buyers. This niche market is made more opaque by a small number of developers who ensure new sale prices are kept high and not tarnished by the second hand market which they are less than transparent about.
The average retirement home will fall in value £30,000-40,000 from new build to resale. We suggest a specialist marketing strategy is required listing the property with an active local agent in retirement homes as well as a specialist in the area. For more information please see our Guide: How to sell a retirement home.
Have a great week.
The Movewise Team