Are house prices set to fall? – Auction Agent Property Auction House

falling house prices

Overview of UK house prices

Questions over UK property market

House prices are always a hot topic of conversation, whether it be from people looking to sell property, property buyers looking to get on the ladder, or just a standard conversation topic with friends in the pub. Over recent years property prices have risen considerably and the question many people are asking is will there be a house price crash?

November 2021 House Price Index

Rightmove has produced their November 2021 house price index recently showing that the asking price of homes coming to the market has reduced on average by 0.6% (£2,044) over the past month. This however could be a seasonal trend with asking prices according to Rightmove having risen on average over the last year by 6.3%. This is also backed up by the monthly report showing that prices also dropped in November 2020 (0.5%), December 2020 (0.6%), and January 2021 (0.9%). Following this, there was an uptrend within the next nine months, with only one month showing a reduction in the average asking price. This shows that over the year that prices have increased and another factor regarding house prices is the basic law of supply and demand. The Rightmove November index shows that the average stock held per estate agent including sold stock went from 66 properties in September 2020 to 46 properties in September 2021, meaning the amount of stock held per estate agent has dropped on average over 30%. Also during the year the average time to secure a buyer according to Rightmove has reduced from 65 days in January 2021 to 36 days in October 2021, meaning that the average time to secure a buyer has dropped by nearly 45%. These figures demonstrate that the housing market during 2021 has been a very good market for sellers with prices rising and the time to sell reducing.

Demand Trend

The big question though is can this trend continue and will house prices keep rising or will there be a house price crash? This question can only be answered speculatively with a number of external factors affecting the housing market such as inflation and interest rates. The last house price crash in 2007 was triggered by the banking collapse, general economy and with all of the figures provided by Rightmove indicating strong demand in the housing market and low supply, it seems that it would need an external market factor to trigger such a collapse.

Your Local Property Experts

Here at Auction Agent Auction House, we have seen a strong year for the housing market with 98% of lots offered in 2021 sold and achieving on average 125% of the reserve price. Buyers may ask where can I buy a cheap house, or where can I get a buy to let investment. Auction is still a good place to buy to pick up properties or land at a good price. With high demand, some estate agents have started to do sealed bids on properties meaning that buyers bid blind when looking to purchase. This means that bidding is behind closed doors and the winning bidder may be considerably above the second-placed bidder, with Auction Agent this will not happen with bids being in the open buyers will at all stages of the auction see where bids are up to and will only purchase one bid above the second-placed bidder, making it fairer for buyers. With such high demand in the market, there is also the risk of buyers getting gazumped, this means another buyer putting a higher bid in when a sale has been agreed to you. This is common in repossession house sales where offers are invited up to point of exchange, this means you can pay for a survey, solicitors fees, and other costs, then be outbid, lose the property, and be out of pocket. At Auction Agent’s property auction this cannot happen, with legal exchange being at the auction, the property is then sold to you with no risk of gazumping taking place.

Conclusion

Overall with the current strength of the housing market, it appears that in the short term there does not appear to be a crash coming, however, as stated earlier there are other external factors that can affect the housing market. Should you require any advice on selling your property or land at auction, purchasing your first home, purchasing a buy to let, or anything else then please contact the Auction Agent team on 01706 940499, info@auctionagent.co.uk, or visit Auction Agent Property Auction House, 38 Manchester Road, Haslingden, BB4 5ST.


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