The latest data from OnTheMarket shows that nearly three-quarters of active buyers remained confident that they would purchase a property within the next three months, while a slightly higher number of sellers were equally confident that they would sell within the same timeframe.
Jason Tebb, chief executive officer of OnTheMarket.com, said: “Many would-be buyers plotting a move had the foresight to secure a mortgage agreement in principle (AIP) in the final quarter of last year, so the clock is ticking for them to purchase a new home before it expires. With a number of lenders raising their mortgage rates on the back of higher money market rates, these potential buyers will be keen to move in the early part of this year or risk losing a favourable mortgage rate. This will focus buyers’ minds like nothing else and we expect activity to be brisk as a result.
“As well as buyers keen to take advantage of cheap mortgage rates, there are those who simply have to move. Family and financial circumstances and the impact of several lockdowns means sadly that many people need to move. These buyers are under pressure due to the lack of stock, which means they may be prepared to compromise on certain factors that they may not have been willing to do so before. This presents an opportunity for those considering selling who have not yet taken the plunge and listed their home.”
Transaction numbers recovered towards the end of last year, following a slump in October as buyers brought forward decisions to buy in order to take advantage of the stamp duty holiday. With this no longer available, it will be interesting to see how the market settles down this year and whether it returns to something approaching normality, according to Tebb
He continued: “The stamp duty holiday was a key driver in encouraging activity but there are many more spurs, such as the desire for more space, changing working practices and low borrowing rates, albeit mortgage pricing is creeping upwards, which will continue to play a part.
“While we are hearing that plenty of valuations are taking place, relatively few have so far turned into instructions. It is common at this time of the year for sellers of family homes to wait until spring to market their properties as they look to benefit from the seasonal boost to the look and feel of properties. Agents are waiting to see whether they get the usual influx of stock as we head towards what is traditionally the busiest time of year, but there is no evidence of this yet.
“What might change over the coming months is that house price growth may start to tail off. Speculative sellers may be waiting for the top of the curve in terms of pricing before listing their homes, but history shows us that trying to time the market is a difficult feat to achieve.
“With double-digit house-price growth in 2021, it remains the best time in two decades to sell and it could be argued that it is better to do so sooner rather than later. Vendors who hold off in the hope of further house price appreciation may then find themselves competing with more sellers once they list their home, with more competition meaning the inevitable downwards pressure on pricing.”