Our Hale office has, at the time of writing, just completed its financial year – and it has been their best ever, for sales volumes and revenue, since opening in 2006. In their final week alone, Hale agreed no fewer than three sales following submissions of ‘best and final offers’ from competing buyers. Furthermore, for their colleagues nearby at Jackson-Stops Alderley Edge, and 65 miles north east in York, the picture is almost as positive.
JUST the north?
Remarkably, this is not just a northern phenomenon. Jackson-Stops offices from Norwich across to Truro have enjoyed a strong summer, with no shortage of buyers – indeed Ipswich, like Hale, looks like it might also notch up a record year. It is the case that sales are taking longer in the South East and recent ONS figures perhaps give a clue as to why: since the house price peaks of 2007, prices in few areas outside the South-East have recovered enough to cover general inflation over that time of, in total, some 38%. In contrast, even after recent falls, the average London house price is still some 55% above the 2007 peak and thus well ahead of inflation. Coupled with gradual wage growth over the years, this means that homes are simply more affordable further away from London, both for locals and for those cashing in on the difference, by moving out. Regional demand is higher as a result.
Despite higher demand (mortgage approvals nationally are also slightly up) there is little pressure either way on prices which, as a broad generalisation, continue to creep upwards at the lowest price levels and downwards at the very highest. These adjustments are so slight that, month-to-month, they are largely imperceptible, especially with regard to a typically unique country house. This inelasticity of prices is illustrated by one Exeter sale also just agreed at the time of writing, in which four would-be buyers of a £600,000 house submitted their best and final offers. All four were within £5,000 of each other. When the spread between competing bids is less than 1%, the message is clear: buyers know what properties are worth and they will not overpay.
Time-rich baby boomer buyers
Who are these well-informed, poker-faced buyers? The comment from Simon Milledge of our Blandford Forum office – which, after a slow spring, has had a tremendously busy summer – rings true for many others:
“Demand is highest for good family houses, but we rarely sell them to families. Most buyers are empty nesters and baby boomers. They are serious about moving, but the classic time pressures just aren’t there.”
This is a key point. Today’s older buyers are not changing jobs or expecting a baby, so they have no deadline. Coupled with healthy but relatively fixed levels of income and equity, their incentive and ability to go above a genuine maximum, is tightly restricted. They also ask a lot more questions about maintenance costs and neighbours.
South east market share growth
Even in the South East, the main issue has not been a shortage of buyers or stock, but the length of time taken for sales to go through (having a knock-on effect where sellers are buying in a different region). There are numerous reasons behind this, but one positive effect for us has been a shift by sellers towards agents (and solicitors) whom they know will be highly proactive in both negotiating a deal and then nurturing it through to completion. This has enabled our south eastern offices to gain market share and thus maintain volumes even within slower markets. For the new Mid Sussex office, it has enabled them to go from zero-to-profitable in just a few months. To quote director Toby Whittome:
“A tougher market is great for us because sellers abandon old relationships in favour of someone more effective. Personally, I never think one buyer is enough. You need at least two – then the whole dynamic changes and we get a chance to secure what really is, the best price.”