Contrary to pessimistic predictions, the UK housing market showed strong performance in both sales activity and price achievements for the week ending 25th February 2024 (Week 8).
In the latest weekly report featuring Chris ‘Property Stato’ Watkin and guest Ben Madden, here are the noteworthy updates:
- Average price per square foot for homes with sale agreed in February is £340 (January 2024 – £331 per sq. ft).
- New property listings last week (Week 8) are 10% above the average for Week 8 from 2017 to 2024.
- The year-to-date (YTD) gross sales are up by 10.7% compared to 2023.
- Net sales from last week are 13.7% higher than Week 8 of 2023.
- One in five sales are falling through.
In-Depth Analysis for Week 8 by Chris:
New listings in the market: The UK added 36,133 new properties, which is 9.8% above the 8-year average of 32,002 for Week 8. This brings the total YTD listings to 257,152, surpassing the 8-year YTD average of 237,035.
Average Listing Price: £442,980.
Difference Between Listing Prices and Sale Agreed Prices: This stands at 26%, which is notably higher than the long-term average of 16-17%, raising some concerns.
Price Reductions: There were 19,240 price reductions last week, substantially more than the 8-year average of 13,528, which indicates that 1 in 8 properties are being reduced monthly – but this is seen as insufficient.
Average Asking Price for Price-Reduced Properties: The average now is £390,507, suggesting that properties in the lower to middle price range are seeing reductions.
Gross Sales: A strong performance with 25,437 properties sold subject to contract (stc) last week, compared to 22,654 in the same week of 2023. The average for 2017/2018/2019 for Week 8 is 23,221.
Accumulative Gross Sales YTD: The total has reached 174,450, above both the 162,112 average for 2017/2018/2019 and 157,540 in 2023 for the same week.
Average Asking Price of Sold STC Properties: Remains steady at £350,459, similar to the latter part of 2023.
Sale Fall Throughs: These have returned to normal moderate levels this week at 5,179, which is still lower than the weekly average of 5,382 fall-throughs in 2023, and much lower than the 7,590 weekly fall-throughs following the Truss Budget.
Sale Fall Through Rate: Has also returned to a medium-term average of 20.36%.
Net Sales: Had a total of 20,258 for the week, which is 13.7% higher than Week 8 in 2023, and above the average of 19,008 for the same week in 2017/2018/2019.
Accumulative Net Sales YTD: The figure stands at 135,867, which is 104.7% of the average for 2017/2018/2019. The YTD figure for 2023 was 117,598.
House Prices for Sale Agreed homes in February: The price stands at £340 per sq. ft, based on 99,454 UK properties sold stc/sale agreed. For reference, in Q4 of 2023 it was £327 per sq. ft, and for the whole year, it averaged £329 per sq. ft.
Comparing the Number of Properties for Sale in January 2024 with January 2023 by region, percentages show differences with some regions experiencing growth while Northern Ireland saw a decline.
The UK Rental Growth from January 2020 to January 2024 also indicates varying increases across regions.
Looking at the UK regions’ fall in available rental properties from 2017 to 2023, the biggest reductions are listed in descending order, with the North East leading and the East Midlands having a negligible increase.
Watkin’s Insights:
It’s important to remember that in 2023, UK estate agents were paid for only about half of their listings (52.8%, to be exact).
Estate agents need to face the fact that they only earned from slightly more than half of the properties that they handled in 2023, with the remaining 47.2% withdrawn from the market.
Several internal industry issues contribute to this low success rate, including the rush to win instructions, providing overvaluations to grab a listing bonus or competitive edge, and uninspired marketing tactics.
Estate agents are encouraged to improve their practices, embrace innovative marketing, and offer advice that aligns with sellers’ needs.
The data suggests the need for realistic expectations and persuasive marketing strategies so that agents can not just participate but lead in the property market.
