There were 456,902 new property instructions in Q3, an 8.8% rise on the year before, putting the supply of homes for sale at their highest level in six years, data from a property analyst found.
According to TwentyCi in its Property and Homemover Report, this was down to the easing of mortgage rates and the potential for additional base rate cuts.
However, the firm said, some homeowners were forced to sell due to “financial duress” caused by higher fixed rates and weaker affordability.
TwentyCi found that the level of sales agreed in Q3 “returned to a healthy trajectory” across the UK, with this rising by 23.4% year-on-year to 332,200. The firm said this was good news for estate agents and suggested the growth in transactions would continue into next year.
There was a 10.9% rise in exchanges, while fall-throughs increased “marginally” by 4%. TwentyCi said this was normal due to the higher number of transactions, and the percentage of failed transactions was roughly the same as last year.
Of all the property listings that have ended this year so far, TwentyCi’s data suggested 38% had at least one price reduction, which was similar to a share of 36% last year but an upward trend from 24% in 2022.
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It said this suggested sellers had “unrealistic” price expectations in some market segments.
Landlords shifting properties
TwentyCi’s report showed the number of rental properties being put up for sale reached the highest point in a decade.
In Q3, 11.3% of all new property listings were homes that had been rented out in the last three years. This was “considerably up” compared to the same period in 2023.
Last year, just 6.8% of newly listed properties were rental properties that had been let out in the last three years.
However, TwentyCi said this rise in formerly rented homes was “less dramatic” when compared to pre-pandemic trends.
The surge in ex-rental homes coming to market was more noticeable in Inner London, where 47.2% of new for-sale homes had been rented within the three previous years.
The firm said as affordability constraints were felt the most in Inner London and the availability of rental homes is already a concern, this would make the affordability and availability of private rental properties “considerably worse” for tenants looking to move to London.
TwentyCi said it did not know how many of these homes would be purchased by different landlords and re-rented, but said this would do little to alleviate affordability and availability challenges.
Colin Bradshaw, CEO of TwentyCi, said: “Aside from mortgage increases, landlords have growing fears around a possible rise in capital gains tax and compliance demands for energy efficiencies and reform of renters rights. Overall, the rental sector has become much more expensive and unpredictable for landlords over the last decade.
“Available properties to rent are at their lowest since TwentyCi has been recording data in the last 15 years, now at 259,000 in September 2024 for the whole of the UK, compared with 332,000 in September 2019 – a reduction of 22%.”
Its data showed there was a 0.5% reduction in the number of new landlord instructions in Q3, while lets agreed rose by 9% and lets increased by 7%.