Asking prices jump 5% in year to September: Rightmove

Featured in Mortgage Strategy

Average UK asking prices increased by 5 per cent to £319,996 in the year to September, the latest figures from Rightmove reveal. Monthly growth was 0.2 per cent in September, taking prices back up to within £269 of the record £320,265 set in July before prices slipped back by 0.2 per cent in August.

 

The property website estimates that there are currently 40 per cent more sales in progress than is typical for this time of year, resulting in delays. Scotland saw the strongest annual growth with asking prices up by 8.8 per cent to £168,272, followed by Yorkshire and the Humber where prices rose by 7.2 per cent to £210,128 and the North West where they were up 7.1 per cent to £212,977.

 

The North East, West Midlands, East Midlands, Wales all saw annual growth of around 6 per cent, while in Greater London it was 4.9 per cent, followed by the South East at 4.4 per cent. In the South West and East of England growth was 3.9 per cent and 3.5 per cent respectively. Nationally, sales agreed for the year to date are down by only 5 per cent on the same period last year. 

 

Two regions - the East of England and the South East - have already overtaken the number of sales agreed for the same period last year as higher average prices means the stamp duty holiday has had more of an impact for buyers in these areas. 

 

Rightmove director of property data Tim Bannister says: “Increased competition for second-stepper homes has pushed prices to a record this month for those looking to take the next step up the ladder. Needing more space has always been the most popular reason for moving house, but now there’s a new urgency for those needing to work from home, which means that there are different sets of buyers competing for the same type of property.” He adds: “When comparing with last year, it’s remarkable that two regions have already caught up with and overtaken the number of sales agreed across the year so far, and if the market continues at its current pace then we could see all areas of England break even over the next month or so. We know that some people are now choosing to move out of London altogether, but these latest figures show that there’s still plenty of activity in the outer areas of the capital. The market remains challenging in Zone 1, as the benefit of living within walking distance of an office in the City has dropped down buyers’ wish lists for now.”

 

York-based estate agent Hudson Moody’s managing director Ben Hudson, says: “In the first few months of the market reopening I was saying that we were as busy as we’d ever been, but even that is now paling into insignificance when compared with how busy we are right now. A number of our buyers are coming from London, as it’s comparatively cheap here relative to the capital. They are selling up their homes in Wandsworth and Clapham and buying a four-bed detached house in York, because they’ll only be commuting from here once or twice a week, something they would never have been able to consider doing before. We’re very much having to make our buyers and sellers aware that the conveyancing process is taking longer at the minute; there’s a mixture of fewer council staff working so searches are taking longer, mortgages taking longer to go through, and solicitors being inundated with work. We’re having to call everyone involved in the sale constantly to make sure things keep moving.”

 

MT Finance director Tomer Aboody says: “Demand for more space has never been higher, with buyers happy to compromise on London living in order to have the garden and study which so many now desire. Commuter belts are now considered to be widening, with areas further out than the home counties becoming attractive to buyers who can live with the extra journey time into the city. This trend doesn’t just apply to London but across all the main cities, and will continue to drive demand in future. Never has our island seemed so small, with the ability to work from home allowing people to move to more affordable areas and own homes which they never possibly thought they could.”

 

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “The Rightmove numbers are always interesting as they are more up-to-date than most and help identify market trends. These latest are no exception and confirm that a two-tier market is developing with strong demand for smaller three- and four-bedroom houses in particular as they prove more popular than flats. However, this extra demand is proving to be a victim of its own success as most lenders and surveyors seem unable to keep up due to lack of capacity – a bit like Covid-19 testing where demand far exceeds supply. Some vendors need to recognise this mini-boom won’t continue indefinitely as buyers are still cautious about taking on too high a commitment and what they consider over-paying for a property which may be in particular demand. Looking forward, we don’t see much change in the near term, even when the furlough scheme unwinds as the effects seem to have been already taken into account.”