The latest data released by Rightmove has revealed that the average price of property coming to market has hit a record high of £313,655.
According to Righmove, the rise of 1.1% over the month (£3,547) has pushed the national average to £313,655, exceeding the previous high of £310,471 set in June 2016. This has been driven by strong buyer demand, with the highest number of sales agreed at this time of year since 2007, before the credit crunch. While the run-up to an election creates a degree of uncertainty and often a pause in activity, this strong set of figures should help mitigate pre-election jitters.
Miles Shipside, Rightmove director and housing market analyst, said: “High buyer demand in most parts of the country has helped to propel the price of newly marketed property to record highs. There are signs of a strong spring market with the number of sales agreed achieved at this time of year being the highest since 2007. It remains to be seen what effect the run-up to the snap election will have, though any slowdown in activity will be counter-balanced by the market’s current fast pace. Indeed, in locations where choice of suitable property is limited hesitation could mean losing out to others who still decide to act.”
In the first-time buyer sector of two bedrooms or fewer we are seeing record prices and strong buyer activity, with a 6.5% annual rate of increase. However, this is tempered by a slower pace of increase further up the market, with an overall annual rate of increase of 2.2%, the lowest recorded since April 2013. This month’s 1.1% rise is also weaker than the average 1.6% spring-boosted surge of the last seven years.
Shipside notes: “Increasingly stretched buyer affordability will continue to be a price moderator for sellers who are over-ambitious with their pricing, tempering the pace of price rises. Strong buyer activity this month has led to 10% higher numbers of sales agreed than in the same period in 2016. This large year-on-year disparity should be viewed cautiously as the comparable timespan in 2016 saw a drop in buy-to-let activity with the additional second home stamp duty. However, they are also up by 3.8% when compared to 2015. With the growth in household numbers and new-build supply struggling to keep pace, demand is strong and has led to the highest sales agreed numbers at this time of year since the heady pre-credit-crunch levels.”
Russell Quirk, founder and CEO of eMoov.co.uk, commented: “Interesting that Rightmove should have observed no wobble in the market where asking prices are concerned, despite the industry indices based on sale completions stating otherwise. This would suggest that UK buyers are still sitting tight despite a marginal cool in market demand and are yet to reduce their price expectations. Overall, the predominant air of confidence seen in the market over the last year from UK home sellers seems to be persisting and this, in turn, should see price growth stabilise.
The marginal decline in the average first-time buyer house price shows the toll an over inflated market has had on first rung buyers and sellers, although this is likely to be an influence from the rental sector.
Previously first-time buyers would get caught in a head to head price war with the aspiring and established buy to let landlords due to the similarity in the desired property stock between both. A battle they rarely won due to their inferior budget and property sale experience of those looking to invest for rental gain rather than as a first-time homeowner.
Although the buy to let market remains a lucrative one, the introduction of an additional 3% penalty on second homes and the reduction in tax relief in the buy to let market has deterred would-be landlords to some extent.
The additional budget they may previously have had to pip first-time buyers to the post is now consumed by the additional financial requirements, and so, the price wars that may have ensued and in turn inflated the average first-time buyer house price, are not as fierce or as frequent in the current market climate."
Jeremy Duncombe, Director, Legal & General Mortgage Club, had this to say: “A fairer and more equal Britain has been a key manifesto promise from every political party. Restructuring our housing market will help make these sentiments a reality. The current imbalance between supply and demand is creating an exclusive home ownership club for those who are financially secure, whether it be via the Bank of Mum and Dad or through individual savings. Our housing market needs to be able to accommodate everyone and this will only be achievable if we tackle the root of the problem. Supply. Unsustainable house price rises will only be tempered by building more homes across a variety of tenures, over the whole of the UK.”