Featured in Financial Reporter:
The average price of property
coming to market increased by 1.1% this month to a new record high of £323,530,
according to the latest Rightmove house price index.
This is 5.5% (£16,818) higher
than a year ago, the highest annual growth rate for over four years.
The momentum caused by the
combination of pent-up and new demand has led to new records in several key
metrics and, as a result, Rightmove forecasts that the annual rate of increase
will rise further before the year-end and peak at around 7%.
Despite the effective market
closure between late March and mid-May, 2% more sales have been agreed so far
this year than in the same period in 2019.
As well as the new price record,
September saw three new records for market activity.
Firstly, the average time to sell
is now 50 days, which is 12 days faster than the same period last year. For the
first time ever, estate agents now have more properties marked as sold than they
have as available for sale.
Finally, the number of sales
reported by agents also set a new record, and was 70% higher than the same
period a year ago.
Rightmove also recorded a 49%
increase in traffic in September compared to the same period last year, which
is the biggest year-on-year jump since 2006. So far in October the number of
sales agreed is still 58% up on the same period last year. The number of active
buyers contacting estate agents also continues to run at a high level, up by
66% in September compared to 12 months ago, and only marginally down on the
peak of +67% seen in July.
Tim Bannister,
Rightmove’s director of property data, commented: “Previous records are tumbling in this
extraordinary market, and there are still some legs left in the upwards march
of property prices. We predict that the annual rate of growth will peak by
December at around 7% higher than a year ago. Many buyers seem willing to pay
record prices for properties that fit their changed post-lockdown needs, though
agents are commenting that some owners’ price expectations are now getting too
optimistic, and not all properties fit the must-have template that buyers are
now seeking. Not only is the time left to sell and legally complete before the
31st March stamp duty deadline being eaten away by the calendar, but more time
is also needed because the sheer volume of sales is making it take longer for
sales that have been agreed to complete the process. Sellers and their agents
should therefore be wary of being too optimistic on their initial asking price,
as whilst activity levels continue to amaze there are some signs of momentum
easing off from these unprecedented levels.
“Prospective buyers are seeing
properties selling fast and prices rising as they search for their next home ,
adding to momentum and spurring them on to act quickly. With the number of
buyers contacting agents still up by two-thirds on a year ago, there is plenty
of fuel left in the tank to drive further activity in the run-up to Christmas
and into next year. There have also been government promises of additional
low-deposit mortgage support for first-time buyers, which could prove to be
timely as we run up to 31st March. It appears that the current momentum,
assisted by the prospect of stamp duty savings, is helping to keep the housing
market healthy. Estate agents have worked hard to give confidence to sellers
and buyers alike that property viewings can be conducted safely, and early
signs show that market activity still remains high in areas with stricter local
lockdowns.” (Financial Reporter)
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