Almost three quarters of estate agents had most of their property sales in November agreed below the asking price, according to research from a body representing the industry.
The report from NAEA Propertymark, a membership organisation for estate agents, said 72% of branches made a majority of their sales last month below the level the client was seeking. This compares to a low of 15% in March, and a pre-pandemic average of 78%.
In further evidence that the housing market has slowed sharply, the report said competition had dropped by more than a third, from a high of 11 new buyers to every new property instructed in a member branch, to only seven.
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This is in stark contrast to the booming market seen as recently as the summer, when buyers were caught in bidding wars.
The number of new buyers registering per member branch dropped again to 52 in November, down from a high of 86 in August. The average number of viewings per property continued to fall, to 2.6. New instructions were down on average to eight per member branch, while the average number of properties available to buy per branch rose slightly to 33 – compared with a pre-pandemic average for November of 38.
The average number of sales agreed per branch dropped to six in November, from 10 in September.
There was some good news for renters, who have seen rents soar to record levels, according to the website Rightmove. 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 fell or were unchanged month on month.
A shortage of rentals has pushed up the amount tenants are forced to pay in recent months but in November the number of available properties to rent rose slightly, to an average of 11 per branch from nine the month before. Competition among tenants also lessened: an average of 77 new applicants were registered per member branch compared with September’s high of 147, although this is still above the pre-pandemic average.
The number of tenants has swelled as some would-be buyers are renting in the hope that mortgage rates will fall in the new year, while more people are living alone with the rise of working from home.
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Nathan Emerson, the chief executive 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 property is available but the competition between those looking has cooled substantially. For those motivated to sell, good, solid buyers are still prominent.
“As for lettings, we are starting to see a decrease in demand; the knock-on effect is that fewer agents are seeing rent rises. It’s possible that prices have peaked, and landlords are well aware that any more rises won’t necessarily be achieved. This is not all good news, however, as landlords’ costs are still rising, leaving many facing a very real possibility of making a loss.”
This article was amended on 14 December 2022. Due to an error in the data supplied, a previous version said in the text and headline that the NAEA Propertymark research showed 72% of sales agreed in November were secured below the asking price; in fact that figure represents the number of estate agent branches that reported making a majority of its sales in November at below asking price.