A Birmingham estate agent has said that the last two summers have been the most sluggish for property sales in his near 20 years in business. Andy McHugo, a director at McHugo Homes in Harborne, said various factors had contributed to the slowdown – though he felt things could be picking up.
He spoke as property website Rightmove reported the proportion of homes having their asking prices cut was higher than in more than a decade. It said that more than a third of properties have had at least one price reduction – something not seen since January 2011.
Rightmove also said the average reduction was at its highest for more than 12 years at 6.2 per cent – which on an average asking price of £366,281, would equate to a £22,709 discount.
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McHugo Homes sells properties across an area including Harborne, Quinton, Halesowen, Edgbaston and other parts of Birmingham.
Mr McHugo said: “In almost 20 years of selling homes, I feel that this summer and last summer have been the most subdued, perhaps due to the impact of not being able to travel in the summers of 2020 and 2021, but obviously with the current economic backdrop also.
“Encouragingly, since the start of September we’ve seen an upturn in inquiries as more homeowners have been motivated to step out into the market place, which should help translate into sales over the coming weeks and months.”
Rightmove said the latest figures suggest that some sellers were too optimistic on their initial asking prices and have had to make some bigger than usual adjustments.
But it said there are signs of activity starting to pick up, with the number of new properties coming to market jumping by 12 per in the first week of September, compared with the average weekly volume in August.
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It also pointed to some mortgage rates having started to ease.
Rightmove said house prices are still on track to meet its prediction of a 2 per cent fall over the year as a whole.
Tim Bannister, Rightmove’s director of property science, said: “It’s been a slower-than-usual August, so all eyes will be on market activity over the next few weeks, which will set the trend for the rest of the year.
“The combination of 14 consecutive Bank of England interest rate rises and many buyers and sellers still catching up on lost pandemic holidays has contributed to a bigger-than-expected summer lull, though we still anticipate an autumn bounce.
“Market conditions still vary considerably in different locations, and so a local estate agent will be best placed to advise sellers to give them the best chance of finding a buyer this autumn.
“As we enter a key selling season, more people who have been thinking about what they need from a home and where they want to be living next year and beyond are taking action and coming to market.
“This has helped to improve buyer choice, especially for those looking for larger homes, which also means that new sellers in the middle and upper sectors need to be extra careful not to set their price expectations too high.
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“Plenty of sales are being agreed for properties that are priced at the right level, and those that are selling are still taking five days less than at this time in 2019. We’re also seeing the number of fall-throughs decline as market conditions and mortgage rates stabilise.”
The report was released as a separate index from estate and letting agent Hamptons indicated that in the rental sector, prices are continuing to increase strongly.
It said that the average rent in Britain topped the £1,300 per month mark for the first time last month, 11 months after passing the £1,200 mark.
The average monthly rent on a newly-let home in August was £1,304.
Hamptons said the average rate of annual rental growth on a newly-let property hit 12 per cent in August, the fastest growth since its index started in 2014.
August’s rate of growth surpassed the previous record of 11.5 per cent which was set in May 2022.
Aneisha Beveridge, head of research at Hamptons, said: “Higher rents are only going some way towards helping mortgaged landlords balance their books, rather than boosting their profit.
“This is one of the reasons we haven’t seen large numbers of new landlords come into the market.”