Summer is over, but is there still heat in the premium property market?

Whilst the days are getting shorter and the temperature drops, I’m going to review if the heat is still in the higher end of the market following the second month of a new government and the first month of a 5% base rate.

The number of new listings to hit the market, properties for sale, and sales being agreed were all up on August last year and the six-year average.

This is all very positive news and highlights the incredible rebound in the market compared to the peak of interest rates this time a year ago.

However, it is not all plain sailing, with price reductions, properties withdrawing, sales falling through, and sellers changing estate agents all on the rise.

The above is clear evidence that we are operating in a very price sensitive market and one with an equal balance in supply and demand.

As you can see from the below image, stock levels are at a 10-year high, but not to an extent that would cause an oversupply of properties to the market, thus resulting in significant price drops.

Buyer demand has bounced back following the drop in interest rates throughout the course of the year and with encouraging signs that they will continue to do so slowly but surely is helping people return to the market with a new found confidence. 

However, the current interest rates are still nowhere near the record lows of a few years ago and this has meant that any sellers pricing above the market are sitting stagnant and unsold. 

Whilst demand is up on last year, stretches on affordability are still a challenge to buyers and if they don’t see value in a property for sale, there is more choice for them to choose from instead compared to previous years.

In conclusion, we are in a very evenly balanced market right now and those that are pricing competitively from the outset and are marketed correctly will find a buyer relatively quickly and for a decent price as well.

As always, the data keeps on coming up from Rightmove and Zoopla stating that price reduced properties are less likely to sell, and if they do find a buyer, will take longer to do so, have a higher chance of falling through, and actually achieve a lower price than if they were priced correctly in the first place.

In my opinion, the agents succeeding in the market at present are having the difficult conversations with potential sellers around prices and timeframes early on and doing a great job in managing their expectations.

This leads me nicely on to my final point of how to get this message across to those sellers thinking of moving in the near future and to those that are thinking of switching estate agents or returning to the market.

Unsurprisingly, I’m going to say by sending direct mail to these properties and there are multiple reasons as to why I would say this.

The main reason I am saying this right now is that as of 7th October, the price of a first-class stamp will rise to £1.65.

The increase in the cost of sending direct mail will mean fewer agents will be using this strategy as they search for cheaper alternatives such as concentrating solely on digital marketing.

However, this comes at an indirect cost due to this type of advertising being very saturated and harder to stand out in a crowded market.

According to Royal Mail, the amount of letters being posted have fallen from 20 billion per year in 2004-2005 to about 6.7 billion in 2023-2024, with the average household now receiving four letters per week, compared to about fourteen letters two decades ago.

If you want to stand out from everyone else, do the complete opposite of what they are doing and buck the trend would be my advice.

I recently interviewed Heather Staff from Street/Spectre on my podcast and she confirmed that 86% of buyers do not sell via the estate agent they bought from and further research has shown me that over 60% of homeowners can’t recall the name of the estate agent they bought from after four years.

Therefore, targeting these homeowners with anniversary messages via direct mail saying how the market has changed since they purchased their home is an open goal as far as I’m concerned to get you through more doors.

If you would like to find out exactly how to implement this strategy, please do feel free to get in touch with me and I will happily explain it to you.

The agents that have consistently implemented this strategy have seen some great results and I hope you do too. 

As always, thank you for reading and stay tuned for the next edition where I will be reviewing how Q3 compared to recent years. 

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