Positive news around the supply of properties coming to market has been few and far between recently, so it is understandable why the industry jumped upon recent data released by Propertymark which appeared to show an increase.
These statistics show new instructions to estate agency branches reached 10 in March, up since the start of the year, however this has to set within the context of ongoing increases in demand as well.
Indeed, the Propertymark data also revealed the average number of new potential buyers registering at each member branch was up from 67 in February to 84 in March. That’s a significant 25% increase, and perhaps tells you why sales agreed also saw a rise in March – up to 10 per branch from eight in February. Properties are not staying unsold for long.
Overall, this data perhaps tells us little we didn’t already know, but after a considerable period when the supply of property appeared to be going in one direction, it is positive to hear Propertymark’s agent members have seen a recent uptick.
That said, it remains very much a seller’s market, which is perhaps allowing them to pick and chose from the large pool of buyers and opt for those who appear the most ‘trouble-free’ in terms of getting them to completion in the quickest time possible.
It’s why, recent data from Hamptons, suggests a notable increase in the number of chain-free transactions taking place this year. It says, that so far in 2022, 73% of all buyers have been chain-free, compared to 69% in 2021 and 65% in 2010.
Hamptons says that a chain-free transaction took an average of 91 days to exchange in April, which it says is 20 days quicker than those which involve a buyer who is also selling a property.
You might well argue, that hasn’t it always been like this, and the answer of course is yes. Why else would agents, when presenting an offer, tell the vendor the circumstances of the buyer if it wasn’t designed to help them make a decision about which offer to accept?
After all, if you are time-focused in terms of your sale, then of course, you are likely to be drawn towards those buyers that present you with a greater opportunity of completing within your desired timescale.
That has always been the case, which is why some vendors are willing to accept lower offers from chain-free buyers – that’s the market at work and it is up the vendor themselves to decide how they want to approach each and every offer they get.
Of course, this hasn’t stopped some commentators from seeking to play the blame game here, with the suggestion that ‘greedy’ landlords and property investors are somehow stopping ‘decent’ home-selling citizens from buying the properties that are so rightfully theirs.
This targeting of certain buyer demographics is really unhelpful in my opinion. After all, the PRS is seeing a shortage of property just as acute as that which is afflicting the owner-occupation space at the moment. Again, you only need to look at the way rents are heading to see that tenant demand outstrips supply severely, and there should be no moral assumption made that buy-to-let borrowers are somehow inferior to first-time buyers, for example.
Indeed, the number of first-time buyers purchasing homes in Great Britain is actually up to 26%, from 24% last year, which was also a previous high, so it appears that the huge focus on helping first-timers onto the ladder, over the past decade, is starting to bear fruit. And, lo and behold, a first-time buyer is chain-free as well so this approach from vendors is benefiting newbies as much as it is landlords or those seeking second homes.
The point here is that, in the current market, a vendor is likely to have multiple offers available to them and, it is their prerogative to choose the one that fits their ‘brief’ most closely.
Clearly, an increase in supply is going to be beneficial to all property market stakeholders, and we absolutely need this to continue going in the right direction, but we work in a free market, and no-one is in a position to stop a vendor from accepting an offer just because the buyer doesn’t also have a property to sell at the same time.
Neither should we be damning those who want to buy for investment purposes, because as mentioned, the PRS is absolutely vital to the UK housing mix, and it is suffering from a lack of supply as much as owner-occupation.
The market has had plenty of interference over the past decade, much of which has been favourable to owner-occupiers; we really don’t need to be telling vendors who they can sell to. In fact, I couldn’t think of a worst way to go about ‘fixing’ the housing gap than attempting to do just that.
Mark Snape is chief executive officer of Broker Conveyancing