The trade bodies also found the regulatory changes in the buy-to-let (BTL) market were “starting to bite” and triggering estate agency consolidation.
“It was always going to be an interesting year, following the announcement of the letting agent fee ban in last November’s Autumn Statement,” said ARLA Propertymark chief executive, David Cox.
He continued: “I think we’re starting to see a consolidation of some agencies in the industry as the fee ban looms, which could explain why the number of properties under management has increased. Landlords are becoming more selective about their property investments in light of last year’s Stamp Duty Land Tax (SDLT) changes.”
“Mortgage Interest Relief (MIR) is starting to bite which is why we saw an increased number of landlords selling up. It’s likely that as we move into 2018, tenants will continue to see rent increases as supply starts to reduce, demand continues apace, and legislative changes increase costs for landlords,” Cox added.
February and June saw the highest number of residential sales agreed, averaging 11 per branch. In comparison, 2016 figures peaked in March, with 10 sales agreed per branch. On average, 2017 saw nine sales per branch every month, compared to eight in 2016.
However, despite the higher quantity of sales agreed, the proportion of sales made to first-time buyers saw the lowest figures since 2013. In 2017, 25% of sales were made to FTBs, compared to 28% in 2016, and 23.7% in 2013.
Moreover, properties were sold for less than asking price on average 77% of the time in 2017, with 4% being sold for more than the original asking price.
Indeed, Mortgage Solutions reported last week that the average UK property is selling for 3.86% – or around £10,000 – under asking price.
NAEA also revealed that buyer demand spiked in January and February, at 425 house-buyers registered per branch.
Housing supply peaked in February with 44 properties available to buy per branch. However, supply has not changed on a yearly basis, with both years averaging at 39 properties available per branch.
Mark Hayward, chief executive at NAEA Propertymark (pictured), said 2017 had been a busy year for the property market and the Budget announcement to abolish stamp duty for FTBs had given them some optimism.
“This year saw an average of 25% of sales to FTBs, the lowest in four years,” Hayward continued. “Looking to next year it will be interesting to see what impact the stamp duty change had on the market, and if it really does help FTBs get on the ladder. We still only have a limited supply of housing available and policymakers need to think about how to help others in the chain, such as second steppers and those that would downsize in order to free up more larger homes suitable for families.”
Rental demand and buy to let
The number of buy-to-let (BTL) landlords selling their properties peaked in March and April, when agents reported a 33% spike.
Rental property supply hit the peak in January at 193 per branch, with the January to October period in 2017 seeing an average of 188 properties available per branch, against the 180 properties in 2016.
Meanwhile, an average 27% of tenants saw their rents increased in 2017, compared to 26% in the previous year.
ARLA also found that properties were viewed more times before being let in 2017, with letting agents typically hosting six viewings per property, against five viewings in 2016.