Diminishing demand amongst foreign buyers and pending Brexit negotiations have left the housing market in a particular lull. As a result, there has been a slowdown in property transactions, with home buyers and sellers taking more caution amidst economic uncertainty.
Homeowners wanting to sell their property are finding themselves having to wait a lot longer than they did a year ago, with buyers now taking more time to make decisions. At the beginning of 2016 the average buyer took 53 minutes during the viewing process to make a decision on whether or not to buy a property. However, buyers this year took an average of 65 minutes to finalise their decision, with an average of 2.4 viewings.
It now takes 102 days for the ‘sold’ sign to go up, while in 2017 it only took 96 days. The buying process is also taking 23% longer than it did in January 2016 with 27% of buyers now asking to view a property three times before submitting an offer.
Even when homeowners have found a potential buyer, more than a third of deals have fallen through. This is perhaps down to the lack of buyer confidence in the run up to Brexit negotiations. These failed deals have cost consumers an estimated £270m a year.
Buyers have also been victim to slower property transactions. News of falling house prices has been met with concern from those wanting to sell their property. A cautious approach by sellers hoping to make a profit has meant that buyers are finding their bids undermined through a practice called gazumping. Gazumping is where a seller retracts an offer after receiving a higher bid from someone else. This is especially becoming an issue in Sheffield, where more than a third of buyers have reported being victims of gazumping.
The south east has been most affected by this housing market lull, with house prices in London falling by 0.8% over the course of last year. The UK’s capital now has the second-slowest property market, after Blackpool. The average property in the capital now takes 126 days to finalise a deal, 15 days longer than in 2017. Further still, houses in London worth more than £1m are taking a whopping 171 days to sell.
So what happens now?
The forecast for 2019 much depends on the outcome of Brexit. The sales market, especially within the south of England, is likely to remain as it is until a deal has been confirmed.