MONDAY 20TH FEBRUARY 2017
Lowest annual increase since 2013 gives warning to over-pricing sellers
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Annual rate of increase lowest since April 2013 at +2.3%, though overall demand remains strong:
- Rightmove traffic at record January levels, with visits up 3% on January 2016’s buy-to-let boosted period
- Investor sectors understandably quieter than this time last year on number of properties coming to market
and number of properties sold
Slower rate of price increases makes it riskier for sellers to over-price their property:
- Analysis shows sellers are 40% more likely to sell if priced right when they first come to market
- Three quarters of agents1 surveyed by Rightmove report price-sensitive markets with buyers reluctant to
enquire if property is priced just a few percent too high
Price of property coming to market up 2.0% (+£5,986) this month, the smallest price rise at this time of year
since February 2009
National average asking prices
Month
Avg. asking price
Monthly change
Annual change
Index
February 2017
£306,231
+2.0%
+2.3%
252.1
January 2017
£300,245
+0.4%
+3.2%
247.2
National average asking prices by market sector (excluding Inner London)
Sector
February 2017
January 2017
Monthly change
Annual change
First-time buyers
£192,097
£188,612
+1.8%
+4.6%
Second-steppers
£259,143
£255,387
+1.5%
+3.8%
Top of the ladder
£530,331
£520,840
+1.8%
+0.1%
Asking price annual rate of change Feb 2013 - Feb 2017
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
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Overview
This month sees the price of property coming to market increase by a surprisingly modest 2.0% (+£5,986),
the smallest price rise at this time of year since February 2009. This is well below the average +5.0% February
uplift over the previous seven years. This contributes to a further slowing in the pace of price rises, with the
annual rate of +2.3% being the lowest since April 2013.
Miles Shipside, Rightmove director and housing market analyst comments: “While the prices of goods in shops
are rising at a faster rate, the pace of price rises in property coming to the market is slowing. They’re still 2.3%
higher than a year ago, but perhaps we’re approaching the territory where many buyers are unable or unwilling to
pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and
a dose of Brexit uncertainty. The housing market has had a long sprint since April 2013 when the annual rate was
last below this level, so it’s not surprising that upwards price pressure is running on tired legs with average prices
today being 23% or nearly £60,000 higher than they were then. This surge in the cost of home-ownership
highlights some of the issues referred to in the government’s recent White Paper on fixing the broken housing
market.”
Early 2016 was boosted by frenzied buy-to-let investors rushing to beat the April stamp duty deadline which
makes this year look subdued by comparison. However, demand remains strong with visits to Rightmove up
3% compared to January 2016, at new record levels for the first full month of the year. Despite the slower
momentum of price increases, the number of properties that estate agents are selling is holding up well in
comparison to a year ago. Sales agreed are down by just 3.1% in January, with the bottom rung of the ladder
understandably being the drag with a fall of 8.9%. This sector, comprised of properties with two bedrooms or
fewer, also saw fewer new listings, down by 10.3% compared to the overall new supply drop of 6.1%.
Shipside observes: “With Rightmove recording over 131 million visits in January, some three million higher than a
year ago, demand for housing is at an all-time high for this time of year. Home-hunters are busy searching online
for the right home at the right price. While seller pricing power appears to be on the wane overall, the numbers of
deals done is very robust, scarcely lower than during last year’s tax-saving rush, although understandably quieter
in the investor sector of two beds or fewer and in parts of London.”
The slower pace of price rises means that over-priced properties are at greater risk of standing out as poorer
value for longer, diminishing the interest of potential buyers. If prices are rising quickly then they will catch up
with an over-priced property sooner, making it less obvious that it is more expensive than local comparable
properties. With buyer affordability increasingly stretched, three quarters of agents (75%) surveyed by
Rightmove report their local market as price sensitive and that an asking price more than a few percent too
high will harm interest levels in the property. Only one in four agents (25%) said interest was still generated if
prices were more than 5% too high. In addition, Rightmove analysis of over 100,000 newly-listed properties
shows that sellers are 40% more likely to sell with that agent if the property is priced right when they first
come to market.
Shipside advises: “The majority of the market is price sensitive with most agents we surveyed reporting that
possible buyers are reluctant to enquire about a property just a few percent too high in price. With the annual rate
of price increase now at 2.3% a property that is over-priced by more than 5% will have to wait more than two years
for the market to catch up with it. Some sellers may have thought there is no price to pay by starting high and
reducing the asking price later. However, our extensive tracking of properties that have found a buyer shows that
your property should substantially out-perform the level of interest in similar properties in your local area during
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the first three weeks of marketing to minimise the risk of being left on the shelf. Over-pricing loses you that vital
initial interest and impetus, and buyers often have reservations about a property that has not sold as quickly as
others or has had a price reduction.”
Agents’ Views
Kevin Shaw, national sales director at estate agency Leaders, says: “Tempting as it may be, it’s never in the
interests of a seller to set an asking price above what a property is really worth. Setting an accurate price, based on
local market conditions, is crucial for achieving both a quick sale and the best possible price. Overpricing,
particularly in a price-sensitive market, will result in the property sitting on the market until the price is dropped,
losing the interest of buyers and ultimately achieving a lower price in the end. With demand as high as it is and the
current lack of supply, we know that an accurately priced property will sell within the first few weeks of coming
onto the market, provided it is well-presented and marketed correctly. Sellers need to be more aware of the risks
of over-pricing and choose an agent that will give them a reliable, honest valuation to help them achieve the best
price for their home.”
James Sims, Director at Brik Estate Agents in Fulham said: “The sales market in Fulham is currently very price
sensitive. We’re noticing that reducing properties by even a marginal 2-3% can make a significant difference to
the level of interest from potential buyers. As is usual at this time of year we’ve had more sellers of properties in
higher priced brackets come to market, and so we’ve been working with them to make sure their property is
marketed at the right price.”
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Average 'time to sell' (no. of days) - National
90
80
79
79
68
70
62
60
60
57
58
60
62
64
65
67
72
50
40
30
20
10
0
Average stock per agent
(including Under Offer/Sold STC)
70
60
53
54
57
57
59
60
50
40
30
20
10
0
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61
60
60
59
56
51
52
Monthly asking price trend
£320,000
£300,000
£280,000
£260,000
£240,000
£220,000
£200,000
% monthly change in average asking prices
4.0%
3.0%
2.0%
1.0%
2.9%
2.0%
1.3%
1.3%
0.4%
0.8%
0.7%
0.9%
0.4%
0.0%
-1.0%
-0.9%
-2.0%
-1.2%
-1.1%
-2.1%
-3.0%
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Regional trends
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London’s best annual performers: February 2017
Borough
Avg. price
Feb 2017
Avg. price
Jan 2017
Monthly
change
Avg. price
Feb 2016
Annual
change
Camden
£1,422,554
£1,118,218
27.2%
£1,117,232
27.3%
Redbridge
£478,079
£446,581
7.1%
£440,222
8.6%
Bexley
£366,344
£370,291
-1.1%
£338,097
8.4%
Havering
£400,456
£391,186
2.4%
£371,090
7.9%
Greenwich
£464,479
£464,144
0.1%
£432,666
7.4%
London’s worst annual performers: February 2017
Borough
Avg. price
Feb 2017
Avg. price
Jan 2017
Monthly
change
Avg. price
Feb 2016
Annual
change
Kensington and Chelsea
£2,126,942
£2,485,483
-14.4%
£2,489,126
-14.6%
Hammersmith and Fulham
£953,345
£948,671
0.5%
£1,069,235
-10.8%
Merton
£641,598
£632,749
1.4%
£704,481
-8.9%
Kingston upon Thames
£592,515
£621,638
-4.7%
£627,672
-5.6%
Hounslow
£534,830
£499,873
7.0%
£563,555
-5.1%
Average 'time to sell' (no. of days) - London
80
66
70
60
50
58
47
47
43
46
51
45
40
30
20
10
0
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51
54
56
56
71
London boroughs
Borough
Avg. price
Feb 2017
Avg. price
Jan 2017
Monthly
change
Avg. price
Feb 2016
Annual
change
Kensington and Chelsea
£2,126,942
£2,485,483
-14.4%
£2,489,126
-14.6%
City of Westminster
£1,926,444
£1,992,328
-3.3%
£2,015,540
-4.4%
Camden
£1,422,554
£1,118,218
27.2%
£1,117,232
27.3%
Hammersmith and Fulham
£953,345
£948,671
0.5%
£1,069,235
-10.8%
Richmond upon Thames
£886,068
£864,137
2.5%
£878,113
0.9%
Wandsworth
£805,719
£775,702
3.9%
£846,666
-4.8%
Islington
£785,356
£807,550
-2.7%
£804,467
-2.4%
Barnet
£696,998
£732,439
-4.8%
£689,060
1.2%
Hackney
£688,163
£732,573
-6.1%
£666,945
3.2%
Southwark
£665,002
£684,410
-2.8%
£659,096
0.9%
Haringey
£649,062
£605,271
7.2%
£625,016
3.8%
Lambeth
£644,160
£662,177
-2.7%
£658,069
-2.1%
Merton
£641,598
£632,749
1.4%
£704,481
-8.9%
Brent
£619,614
£573,189
8.1%
£649,889
-4.7%
Tower Hamlets
£608,284
£600,774
1.3%
£578,662
5.1%
Ealing
£605,870
£604,736
0.2%
£632,596
-4.2%
Kingston upon Thames
£592,515
£621,638
-4.7%
£627,672
-5.6%
Harrow
£551,855
£542,733
1.7%
£542,901
1.6%
Hounslow
£534,830
£499,873
7.0%
£563,555
-5.1%
Bromley
£534,213
£556,044
-3.9%
£532,505
0.3%
Hillingdon
£482,408
£483,951
-0.3%
£478,230
0.9%
Enfield
£480,322
£486,236
-1.2%
£452,818
6.1%
Redbridge
£478,079
£446,581
7.1%
£440,222
8.6%
Waltham Forest
£471,488
£475,186
-0.8%
£452,689
4.2%
Lewisham
£465,590
£473,592
-1.7%
£457,352
1.8%
Greenwich
£464,479
£464,144
0.1%
£432,666
7.4%
Sutton
£441,840
£437,115
1.1%
£442,303
-0.1%
Croydon
£425,581
£423,347
0.5%
£399,953
6.4%
Newham
£418,835
£426,971
-1.9%
£396,582
5.6%
Havering
£400,456
£391,186
2.4%
£371,090
7.9%
Bexley
£366,344
£370,291
-1.1%
£338,097
8.4%
Barking and Dagenham
£303,182
£298,255
1.7%
£291,638
4.0%
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Editors’ notes
1 Online poll of 108 agents on 14th February 2017.
About the Index:
The Rightmove House Price Index methodology has been refined as of January 2015. The Index now uses new mapping
technology to define regions at a postcode rather than postcode district or area level, and the mix adjustment has been
updated to reflect the current proportion of stock by property type in each area, to provide even more accurate data. All
regional breakdowns are now reported in line with ONS regions. For the purpose of historical comparisons, the historical
figures have been restated based on the new methodology.
The Index can now include further breakdowns in the housing market to offer trends at three different sectors of the
market: first-time buyer, second-stepper and top of the ladder. Inner London prices have been excluded from this
categorisation as the normal housing ladder is not really applicable.
Advertising property for over 90% of all UK estate agents, Rightmove is in a unique position to identify any immediate
changes in the market. Rightmove’s House Price Index is compiled from the asking prices of properties coming onto the
market via over 13,000 estate agency branches listing on Rightmove.co.uk. Rather than being a survey of opinions as with
some other indices, it is produced from factual data of actual asking prices of properties currently on the market. The
sample includes up to 200,000 homes each month – representing circa 90% of the market, the largest and most up-todate monthly sample of any house price indicator in the UK. 95% of properties are sold via an agent, whilst only 75% are
purchased with a mortgage. The Index differs from other house price indicators in that it reflects asking prices when
properties first come onto the market, rather than those recorded by lenders during the mortgage application process or
final sales prices reported to the Land Registry. In essence, Rightmove’s Index measures prices at the very beginning of
the home buying and selling process while other indices measure prices at points later in the process. Having a large
sample size and being very up-to-date, the Rightmove Index has established itself as a reliable indicator of current and
future trends in the housing market.
Rightmove measured 130,114 asking prices this month, circa 90% of the UK market. The properties were put on sale by
estate agents from 8th January 2017 to 11th February 2017 and advertised on Rightmove.co.uk. Due to enhanced data
quality this figure has been restated as of December 2016.
Market sectors explained:
First-time buyer: This figure represents the typical property a first-time buyer would purchase, covering all two bed
properties and smaller that come to market (houses and flats).
Second-stepper: This figure represents the typical property of a person moving from their first home, covering all three
and four bed properties that come to market (houses and flats) excluding four bed detached houses.
Top of the ladder: This figure represents asking prices at the top end of the market, covering all five bed properties and
above (houses and flats), as well as four bed detached houses.
About Rightmove.co.uk:
Rightmove.co.uk is the UK’s leading property website, displaying details of homes for sale or rent to the largest online
audience. It is consistently ranked the number one property website in the UK (source: Experian Hitwise). It has around
90% of all properties for sale and at any time displays a stock of over one million properties to buy or rent, worth around
£270 billion. The Rightmove.co.uk site attracts over 110 million visits from home movers each month who view in excess
of 1.5 billion pages (Rightmove data, 2015).
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