Opportunity knocks...just not in 2021

House prices soared by 10.9 percent annually in May, making the strongest monthly growth in almost seven years, according to the Nationwide Building Society.

What I’m seeing and hearing confirms this. Although prices are shooting skywards, the property market here in Norfolk is incredibly slow. Good houses are at a premium and are not coming on the market with the same speed as we’d expect. It’s very frustrating. I can’t help but wonder if some of the house-price fire is being fuelled by estate agents desperate to attract the attention of potential sellers who might be persuaded by all the publicity to put their house on the market.

There’s also the valuation factor to consider. A property will probably sell for above the asking price if the headline figure is set by the agent and vendor at a lower rather than higher level. I wonder how much of this ‘inflation’ is underpinned by a new realism in valuations, especially given the wariness of mortgage lenders to agree on funding on over-priced properties. I’ve also heard that in some instances, the selling agent is quoting a fee at a much lower percentage than usual to sell a property at the asking price. But if they achieve a price higher than the asking price the percentage goes up to three or four times above the starting fee. If they get a competitive bidding war going on, then they get a higher percentage. So obviously, they are keen to get the higher fee and competitive offers coming in.

Interestingly one Norfolk estate agent tells me that out of the 50 houses his firm has for sale across numerous offices each property is on average, currently being sold for around 15 percent over the asking price, although I am finding it is closer to 20 percent. Other selling agents tell me that although they may send out 20 ‘Best and Final Offer’ letters more and more would-be buyers refuse to take part, as they are entirely fed up with the process. So, it will be interesting to see if this method is continued to be used or a telephone auction might be adopted.

In what we might call ‘normal times’ a certain number of houses are being sold as people are downsizing. Of course, they will put theirs on the market when there are properties they want to move on to. However, presently people are not selling as they can’t see anywhere they want to go, because things are not coming up for sale. It’s definitely the case that properties have to be sold as its Death, Divorce, or Debt but the other D, Downsizing, is not coming into the frame. Then there are always the properties that come on the market on an 8/10-year cycle. We find people buy houses up here when children are at school so they have a house to be nearby. They enjoy it whilst they are here and then might think of selling, maybe after 10 years or so. Or they sell it as the maintenance gets more expensive, or they are not using it as much, or the holiday rentals are not as popular as they were.

But of course, for the last two years, we have not been going away and rentals and staycations are doing really well. So people have decided not to sell and cash in on the staycations instead. This in turn is adding to the severe lack of property on the market.

Some agents I know are worryingly short of properties to sell. They only have three to five properties for sale when at this time of year they would usually have 30 to 40 on their books.

Of course, I’m keeping clients in touch and letting people know as soon as I hear about a property and when it becomes available. I really am doing everything I can to find buyers what they are looking for. However, my worry is that even after the Stamp Duty holiday comes to an end on June 30 it won’t increase the number of houses for sale. I’m afraid that until foreign travel picks up and we can all go away more freely, most people will be opting to stay firmly at home. Not so good for the environment I do admit, but better for buyers and sellers I’d argue.

Jamie