The number of property sales continued to fall at the end of last year, with more homes selling for less than expected, a new report shows.
The report is the latest insight into the state of the UK housing market and is published by Propertymark, a real estate agency.
It said there was a 28 per cent reduction in the number of new properties coming onto the market last month.
And at the same time there was a 31 percent drop in the number of registered buyers.
According to Propertymark, the number of property sales fell further at the end of last year
There was an average of only five homes for sale per real estate agency in December, compared to six in November (rounded from 4.6 and 6.4 respectively).
The number of agreed sales also fell. According to the report, they fell further in December to just four for each brokerage industry, compared to six the month before.
This lower demand partly explains the slight increase in the percentage of real estate agents who sell homes for less than the asking price.
There was also a slight decrease in the number of agents reporting properties sold at asking price.
The average number of registered new potential buyers per location has fallen from 49 in November to 34 in December, according to Propertymark
Real estate agents describe December as a ‘gloomy’ month, but at the beginning of 2024 a new picture is emerging with a remarkable increase in the number of buyers who are now registering.
Alex Lyle, of estate agents Antony Roberts, said: ‘Last year we noticed a real return to seasonality. December tends to be quieter as you’re battling Christmas, there are few new buyers, little new stock and people toying with the idea of moving are sitting on their hands waiting for the New Year.
‘There was little good news before Christmas, apart from another increase in the base rate by the Bank of England. That was the start of something, but not significant enough to motivate buyers and sellers since lenders hadn’t really started cutting their mortgage rates yet.
‘If you asked sellers in December how confident they were of finding a buyer, they would have been quite gloomy about their prospects.
‘Chances are they have been on the market for a while as few choose to launch in December, so it would likely be that their property has been for sale since September or October when the market was busier. Come December and if they aren’t sold by then, they may think their chances are gone.
‘It’s worth noting that the picture is very different since the turn of the year, with a significant increase in the number of buyers registering and an increase in activity, meaning our agents’ calendars are full.’
And Propertymark’s Nathan Emerson said: ‘December marks the end of an interesting and challenging year within the property market.
‘In the broader economy, interest rates have stabilized, but inflation concerns persist and GDP growth is anemic.
“In response to these and other factors, home prices have fallen in some areas.”
According to the latest figures, the average house price fell to £301,613 in November, down from £305,148 in October.
Real estate agents describe December as a ‘gloomy’ month, but say that a new, more positive picture is emerging this year
Propertymark said the average house price fell to £301,613 in November, compared to £305,148 in October
Mr Emerson added: ‘In the home sales sector we have bottomed out the seasonal trend that starts in autumn and runs through to Christmas.
‘Key supply and demand indicators, such as the number of registered buyers and the number of new sales instructions, are at the lowest point of the year.
‘As we enter 2024, pressure on house prices remains, with further adjustments needed to align valuations with market expectations.
‘Looking ahead to January, we can expect a vibrant start to the year. Whether this sets the pace for the year as a whole will depend on the stability of the broader economy and the actions of policymakers.”
In December, Nationwide Building Society separately reported that house prices in 2023 would be 1.8 percent lower than a year ago.
It said a typical house in Britain at the time was worth £259,157, almost 4.5 percent less than the all-time high recorded in late summer 2022.
Although house prices have fallen only slightly over the past twelve months, the number of houses bought and sold fell significantly in 2023.
According to Nationwide, total transactions over the past six months are around 10 per cent below pre-pandemic levels, with the number of transactions involving a mortgage down around 20 per cent, reflecting the impact of higher borrowing costs.
However, fixed mortgage rates continue to decline from their summer peak.