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Commentary: New Rightmove data indicates "dark clouds building" over UK housing market

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We give market commentary when journalists or news outlets approach us directly for comment on specific topics. We share our commentary here too. See below.

Although market activity remains buoyant, there are certainly dark clouds beginning to build on the horizon. We’ve never been in a situation like the one we’re currently seeing, where so many homebuyers are delayed for months on end. There will be a serious number of sales that fail to complete before the end of March, at which point we could see mass fall throughs as buyers look to change the goalposts at the last minute in order to account for the additional cost of stamp duty. Such a drastic drop in transactions is almost certain to cause house prices to fall and while this may only be a temporary drop, it will no doubt be prolonged due to the tricky economic climate caused due to Covid.

Rightmove House Price Index - Feb '21

"

20% of sales from July are still on-going

Although market activity remains buoyant, there are certainly dark clouds beginning to build on the horizon.

According to Rightmove's index this month, one in five buyers who agreed a purchase in July last year have still not completed more than six months later.

We’ve never been in a situation like the one we’re currently seeing, where so many homebuyers are delayed for months on end.

Impending Stamp Duty Deadline - 100,000 sales at risk

Furthermore, Rightmove are estimating that 100,000 of these agreed sales will fail to complete by the end of March, meaning purchasers will miss out on on their expected stamp duty tax saving.

In our recent survey of over 3,000 home buyers, 39% told us they would need to withdraw from the purchase if it didn't complete in time for the Stamp Duty deadline at the end of March.

This means we could see fall-throughs and renegotiations on a massive scale as buyers look to change the goalposts at the last minute in order to account for the additional cost of stamp duty. This would leave huge numbers of sellers looking for someone to buy their house quickly to help get their plans back on track..

If that happens, such a drastic drop in transactions is almost certain to cause house prices to fall and while this may only be a temporary drop, it will no doubt be prolonged due to the tricky economic climate caused due to Covid.

Data shows an increase in prices - but beware

Rightmove's index reports an increase in prices of 0.5% this month, after falling for 3 consecutive months from November to January. But it's important to remember that Rightmove's data is based on seller asking prices, and not what sales are actually being agreed at, much less what they're actually completing at.

"

20% of sales from July are still on-going

Although market activity remains buoyant, there are certainly dark clouds beginning to build on the horizon.

According to Rightmove's index this month, one in five buyers who agreed a purchase in July last year have still not completed more than six months later.

We’ve never been in a situation like the one we’re currently seeing, where so many homebuyers are delayed for months on end.

Impending Stamp Duty Deadline - 100,000 sales at risk

Furthermore, Rightmove are estimating that 100,000 of these agreed sales will fail to complete by the end of March, meaning purchasers will miss out on on their expected stamp duty tax saving.

In our recent survey of over 3,000 home buyers, 39% told us they would need to withdraw from the purchase if it didn't complete in time for the Stamp Duty deadline at the end of March.

This means we could see fall-throughs and renegotiations on a massive scale as buyers look to change the goalposts at the last minute in order to account for the additional cost of stamp duty. This would leave huge numbers of sellers looking for someone to buy their house quickly to help get their plans back on track..

If that happens, such a drastic drop in transactions is almost certain to cause house prices to fall and while this may only be a temporary drop, it will no doubt be prolonged due to the tricky economic climate caused due to Covid.

Data shows an increase in prices - but beware

Rightmove's index reports an increase in prices of 0.5% this month, after falling for 3 consecutive months from November to January. But it's important to remember that Rightmove's data is based on seller asking prices, and not what sales are actually being agreed at, much less what they're actually completing at.

See data & sources

You can view Rightmove's full release here: Rightmove House Price Index, February 2021

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