Asking prices for homes up for sale across Britain have reached the highest level on record in the past month, fresh figures from Rightmove suggest.
The average asking price jumped over £6,700 to a new ‘all-time high’ of £327,797 in a single month, with buyers flocking to snap up homes with ample outdoor space and options for home working.
On a monthly basis, average asking prices climbed over 2 per cent amid ‘frenzied’ buyer activity, and on an annual basis asking prices have risen by 5.1 per cent.
On the up: Average asking prices have reached a new all-time high, Rightmove says
The numbers are striking, but average asking prices are very different to the final price a home ends up being sold for. A property is only ever really worth what a buyer is prepared to pay for it.
Still, with demand from buyers so strong, the time taken to sell a home has, according to Rightmove, reached its lowest ever level, at around 51 days.
Prospective buyers looking for popular two or three-bedroom semi-detached homes can expect to be forced to get stuck into the bidding process much faster, as more homes in this category are selling within a week than ever before, according to the data.
The pace at which two and three-bedroom semi-detached homes appear to be selling suggests the upturn in demand is being driven by the mass market, ‘where few buyers will be achieving the maximum stamp duty savings’.
While many on are the hunt for a modest semi-detached property, Rightmove told This is Money that one of the most viewed homes on its website in the past month was a 12-bedroom mansion block on the market in London with a guide price of over £54million.
Rightmove said the number of sales agreed in the past month was 55 per cent higher than over the same period two years ago.
On the central issue of stock levels, Rightmove said that while 145,000 properties were newly listed in the past month, this was ‘not enough to meet buyer demand.’
‘The Treasury should consider the introduction of stamp duty relief for downsizers as one way of encouraging the release of some much-needed stock onto the market’, Tomer Aboody, a director of property lender MT Finance, said.
Richard Freshwater, a director at property group Cheffins, said: This is the biggest lack of stock we’ve seen on the market for at least the past 20 years.
Stock issues: Low levels of housing stock coming up for sale remains a problem
Time to sell: The average time taken to sell a home has fallen, according to Rightmove
Wow: One of the most viewed homes on Rightmove has been this 12-bedroom London mansion
Luxury: The London mansion is on sale via Knight Frank for a guide price of over £54m
He added: ‘The dreary five day a week for many is now over, and this has led to areas outside of London becoming some of the most in demand.’
Taking one example, Mr Freshwater said a single five-bedroom home near Cambridge attracted 27 viewings in a week, received 12 offers and sold quickly for ‘well over’ asking price.
The average number of homes on estate agents’ books stands at around 55, while in November last year it was 66.
In his recent Budget, Chancellor Rishi Sunak extended the stamp duty holiday until the end of June. Since the Chancellor first unleashed the scheme last year, the housing market has seen buyer demand – and prices – rise sharply. Rightmove said it received a record 9.3million visits to its website on 7 April alone and in March saw people spend 2billion minutes on its site.
Tim Bannister, Rightmove’s director property data, said: ‘This is only the second time over the past five years that prices have increased by over 2% in a month, so it’s a big jump, especially bearing in mind that the lockdown restrictions are still limiting the population’s movements and activities.’
He said: ‘The stars have aligned for this spring surge, with buyers’ new space requirements being part of the constellation alongside cheap mortgages, stamp duty holiday extensions in England and Wales, Government support for 95% mortgages and a shortage of suitable property to buy.’
Price shifts: A table showing what’s been happening to average property prices
‘If you’re looking to buy in the current frenetic market then you need to be on your toes and ready to move more quickly than ever before’, Mr Bannister added.
In terms of what the future could hold for the property market, Rightmove said it thinks the ‘froth’ is likely to ease up after the spring surge as Government support initiated during the pandemic falls away and economic realities hit home. But, it added: ‘Nevertheless we expect activity to remain robust for the rest of 2021.’
The extent to which average asking prices have increased varies depending on a property’s location and what rung of the ladder the buyer is on. At the pricier end of the market, average asking prices have risen by 7.4 per cent in the past year, while first-time buyers are now looking at asking prices over 4 per cent higher than a year ago.
New ultra-low UK Government-backed 5 per cent deposit deals launched by the likes of Lloyds, HSBC, Barclays, Santander and NatWest could give some first-time buyers a much-needed boost, but many may still be locked out of the market maid fierce competition and high prices.
Rightmove’s Mr Bannister said: ‘The combination of not enough stock and high demand will help underpin prices, and over the past five years asking prices of a typical first-time buyer home have already increased by £23,000 on average, so those who can now afford to buy a home will be trying to make the move quickly in case prices rise further.’
Take a look back: A chart from Rightmove showing asking price shifts since April 2016
Wales has seen the biggest jump in average asking prices over the past year, with a 12.2 per cent upturn and price tags hovering around the £220,774 mark.
Yorkshire and the Humber saw the second biggest average asking price leap, with a 9.4 per cent increase to around £214,045. Average asking prices in Scotland have risen by 8.5 per cent to £169,649 and homes here are taking just 33 days to sell on average.
London saw the smallest hike in asking prices, seeing price tags climb 1.4 per cent to £635,306. But, in the past month, average asking prices have increased by 1.7 per cent. At 64 days, homes in the capital are currently taking longer to sell than anywhere else in the country, Rightmove’s figures suggest.
Mr Aboody, said: ‘Interestingly, London price changes vary depending on the distance to Central London, with the closest boroughs experiencing minimal-to-no growth over the past year, with some even seeing prices reduce.
‘This can be put down to the high property values already seen in these boroughs and the lack of people being able to buy, whereas further out is still affordable and demand therefore higher.
‘You will get very little for less than £500,000 in the most central London boroughs, so the stamp duty holiday is purely a bonus rather than a reason to buy.’
Figures published by the Office for National Statistics last month revealed average house prices increased by 7.5 per cent in the year to January, down from 8 per cent in December.
In England, prices rose by 7.5 per cent to £267,000, while in Wales, Scotland and Northern Ireland they increased by 9.6 per cent, 6.9 per cent and 5.3 per cent respectively, the ONS said.
No one really knows what the future holds for the property market, and some experts think a correction is due. Others, however, believe the upward trajectory looks set to continue.
Ben Taylor, the boss of Keller Williams UK, said: ‘House prices have gone stratospheric and if you believe that what goes up, must come down, then surely we must be due a correction soon.
‘That said, there have only ever been two periods in the last thirty years where house prices have fallen over any significant time and so there are smarter bets to be made.
‘If anything, the new Government-subsidised low deposit mortgage, and interest rates that are set to fall still further, will probably cause this explosive market to continue crackling.’
All in the detail: Percentage monthly changes in average asking prices, by Rightmove
Your region covered: A map showing asking price fluctuations all over the country
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