According to the newest House Price Index by Rightmove, it takes on average 150 days to complete a purchase due to a conveyancing log-jam.
With the time to complete a purchase being 50 days longer on average than in the same period in 2019, potential house movers are advised to instruct an estate agent now, if they want to spend Christmas in their new home.
With over 500,000 properties currently being sold subject to contract, no wonder it takes 44% longer than in 2019 for a property to move from sold subject to contract to completion.
‘Proceedable’ Buyers Preferred To Complete A Purchase Quickly
As a result of the time it takes to complete a purchase, many vendors ask agents to only allow buyers who are ready to proceed to view their house. Therefore, the property portal recommends homeowners who want to move to accept an offer on their home before they look for their next home.
By putting themselves into a good position as a buyer, homeowners will find it easier to compete with first-time or cash buyers.
Existing homeowners looking to buy again will still need to put themselves in the best possible position to secure their next home in this strong market by making sure they find a buyer for their current property before looking for their next home. This is all the more important for those hoping to complete the process as quickly as possible and enjoy Christmas in a new home this year.
Tim Bannister, Director of Property Science at Rightmove
Demand Still Outstrips Supply
While it might take around 5 months to complete a purchase, on average it only takes 32 days to find a buyer. This means competition for new properties is still fierce, with buyer demand 113% higher than the pre-pandemic five-year average.
However, there are signs that the difference between supply and demand is starting to balance out again. With average stock per agent rising slowly since February 2022.
With on average 46 properties per agent, the market is back to the levels of October 2021. And while there is still a way to go to reach the same levels as in May last year, the trend is upwards, with 7% more properties coming on the market than this time last year.
Although buyer demand is still more than double as high as in the pre-pandemic five-year average, it has declined by 8% from April to May.
Rightmove expects that as the cost-of-living crisis squeezes household budgets and interest rates rises make mortgages less affordable, buyer demand will slow down.
Combined with fresh housing stock coming on the market, this should balance the market in time. With less demand, the number of properties stuck in the conveyancing process will also become less, and in due course the time to complete a purchase will return to normal levels.
House Prices Are Still Rising
Rightmove’s recent House Price Index also shows that while prices are still rising, the rate at which they rise continues to slow down.
With a record high average asking price of £368,614 in May, prices have risen now in six consecutive months. The annual price growth now stands at 9.7%. However, when we look at the monthly growth, the price rose by only 0.3%.
Compared to May, where the monthly increase was 2.1%, this month’s rise is modest. As a result, annual growth is now 0.5% lower than in May.
This signals that the market continues to slow down and the property portal expects that by the end of the year the annual growth will stand by around 5%.
Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing. We expect this to bring the annual rate of price growth down from the current 9.7% towards the 5% increase that Rightmove predicted at the beginning of the year.
Tim Bannister, Director of Property Science at Rightmove
In terms of types of properties, the biggest monthly rise was seen with second-stepper properties, which have seen a rise of 0.8%. First time buyer homes have seen a rise of 0.5% and prices of top of the ladder properties have risen by 0.3%.
Second-stepper properties include all three and four bedroom properties except four bed detached houses. These have also seen the biggest annual growth so far, with 11.3%.
The reason why this type has seen the highest price rise, is because these were the properties that were the most thought after in the ‘race for space’ during the pandemic. It’s also the type of property that has the lowest supply in the current market.
So while the housing market is still fast and favours sellers, there are signs of the imbalance being redressed. This will also mean that the time to complete a purchase will come down again, once the market has slowed down.
