House Price Index

May 2024

Record asking prices driven by pent-up demand

  • The average price of property coming to the market for sale reaches a new record of £375,131, rising by 0.8% (+£2,807) in the month, as the momentum of the Spring selling season exerts some modest upwards price pressure :
    • The market remains price-sensitive with average asking prices just 0.6% higher than a year ago
    • The top-of-the-ladder sector is still leading price growth, with average prices up by 1.3% compared with last year
  • Pent-up demand from would-be buyers who paused their plans last year is a key driver behind increased home-mover activity despite mortgage rates remaining elevated for longer than anticipated:
    • The number of sales being agreed during the first four months of the year is 17% higher than last year, outstripping the 12% increase in the number of new sellers coming to market
  • Despite these positive lead indicators for higher transaction levels this year, the painful average of 154 days between agreeing a sale and legal completion remains a challenge for both agents and movers:
    • With 62 days on average needed to find a buyer before the legal process even begins, would-be sellers hoping to be in a new home for Christmas need to be taking action now
    • Rightmove’s analysis shows that properties that need an asking price reduction take more than three times longer to find a buyer as those that do not, giving sellers who price right from the outset the edge to sell more quickly

The average price of property coming to the market for sale rises by 0.8% this month (+£2,807) to a new record of £375,131 as the momentum of the Spring selling season exerts some modest upwards price pressure. May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years. Price growth is still led by the largest-homes, top-of-the-ladder sector, with prices in this sector up by an average of 1.3% compared with last year. However, since the last price record set a year ago in May 2023, average prices are only 0.6% higher overall, a reminder that the market remains very price-sensitive.

“Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the Base Rate up to 5.25%, where it has remained since August 2023.  However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price. The top-of-the-ladder sector is still leading the way, while from a regional perspective the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth. However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched.”

Tim Bannister Rightmove’s Director of Property Science

Pent-up demand is a key driver behind increased buyer and seller activity, despite mortgage rates remaining elevated for longer than anticipated. In the first four months of the year, the number of sales being agreed between buyers and sellers is 17% higher than in the same period in 2023, outstripping the 12% increase in the number of new sellers coming to market. Like pricing activity, these trends are being driven most by the top-of-the-ladder sector, made up of four bedroom detached and five bedroom plus properties. A lack of available homes for sale in this sector during the pandemic years, together with the rapid rise, and subsequent volatility of mortgage rates in the post-mini-Budget period, meant that activity in this sector was particularly susceptible to some potential movers taking a step back. Now, with mortgage rates more stable albeit still high, and greater buyer choice, many who had postponed their moving plans in this sector appear to be returning.

We anticipate the number of completed sales transactions this year to reach around 1.1 million. Rightmove’s key lead indicators, powered by the UK’s largest selection of properties for sale and real-time data, suggest positive progress towards reaching this number of transactions. However, the lengthy time to complete a sale after finding a buyer remains a challenge for both agents and movers. The average time between agreeing a sale and legal completion is a painful five months, or 154 days. In total, it is taking over 7 months on average from a seller coming to market to completing their move, meaning that as early as it may seem, would-be sellers hoping to celebrate Christmas in a new home need to be coming to the market about now.

The sluggish completion process in England is something that parliament is reviewing as part of its inquiry into improving the home buying and selling process. When compared with international markets, England’s average completion times are significantly slower, highlighting the substantial room for improvement. The creation of a more seamless process, which includes providing more accurate information about a home earlier to potential buyers, and better connecting the parties involved in the transacting process through technology, are two areas of improvement that Rightmove suggests would be most beneficial to movers.

One strategy that Rightmove’s market-leading data has identified as providing sellers with the edge to speed up a sale, is to work with an estate agent to price competitively from the outset and avoid the need to reduce the asking price after coming to market. It takes on average 32 day for a sale to be agreed for a property that is priced right from the outset, less than a third of the 112 days that it takes if the home requires an asking price reduction before it has found a buyer.

“We expect that the improved market activity levels and conditions this year will result in higher transaction numbers at the end of 2024 than last year. However, the extremely lengthy legal completion process is a frustrating barrier to home-movers converting agreed sales into completed transactions more quickly. It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market. One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly.”

Tim Bannister Rightmove’s Director of Property Science

Experts’ views

“Seasonal demand and an uptick in listings has helped to boost spring transactions, although some may still be waiting in the wings for an elusive interest rate drop to ease affordability constraints. With inflation falling, there is hope the wait may come to an end soon as the Bank of England may look for an economic boost before the General Election.

“The message here is that lifestyle changes and supply are still the dominating market forces for most, anchoring house prices for the foreseeable future to provide much needed stability and assurance. The more positive macro-economic outlook in recent weeks has even led some to revise house price forecasts for the year upwards from decline to growth; consumer confidence that will likely trickle into a busy summer ahead.

“In particular, demand for detached homes and prime country properties are attracting the highest competition from buyers, as beauty spots come into their own, with the sun finally out and people aiming to move by the end of the year. Places like the Cotswolds, Essex and Hampshire have seen a remarkable uptick in buyer enquiries in the past six weeks, notably from families looking for top schools.”

Nick Leeming, Chairman of Jackson-Stops

“Whilst long completion times have been a fact of life for years, it remains painful for home-movers, and we see it as something technology can and will solve. At the heart of it, the delays are caused by problems of communication, and the difficulty in rapidly obtaining accurate data in a secure way. There’s certainly a lot of progress that can be made, and whilst there’s no silver bullet, we hope to eventually see some dramatic improvements in the current time to complete.”

Dan Salmons, CEO at property technology company Coadjute

The House Price Index is the largest, most up-to-date monthly sample of residential property asking prices. The index monitors changes in house prices both annually and monthly, providing a comprehensive view on the current state of the property market in England, Scotland and Wales.

Based on circa 95% of newly marketed property, the Rightmove House Price Index is the leading indicator of residential property prices in England, Scotland and Wales.

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