House Price Index
Hottest ever competition to buy a home and highest ever prices
- The national average price of property coming to market hits a new all-time high after rising by 0.3% (+£1,091) this month, to £338,462
- This new record high is only £15 higher than the previous record set in July, a sign that prices are now stabilising
- Hottest ever competition to buy, with buyer demand per property for sale more than double pre-pandemic levels
- The rise of the ‘power buyer’ continues – those who have already sold their own home, have cash in the bank, or are first time buyers with a mortgage agreed, are in a more powerful position and are out-muscling those who still need to sell their current home
- Early signs of a better-balanced autumn market with more homes coming up for sale to help with buyer choice, with the number of new listings in the first two weeks of September 14% higher than the last two weeks of August
National average asking prices of newly marketed properties have risen by 0.3% (+£1,091) this month to hit a new all-time high of £338,462. Despite the traditional summer holiday lull, fierce competition continues among buyers for the record low number of available properties for sale. That competition is hotter than ever, with buyer demand per property for sale more than double that of pre-pandemic levels. Nevertheless, as we enter the busy autumn period, there are early signs of more properties coming to market, which may help to slowly rebuild buyer choice. Buyers who have already sold their own property, have the cash to buy without selling, or are first time buyers with a mortgage agreed will be in the most powerful position to secure the best of any additional autumn choice.
Tim Bannister, Rightmove’s Director of Property Data comments: “While the holiday-starved took their break over summer, the high ratio of buyer demand to properties for sale means that the property market remains stock-starved despite the summer lull lessening overall activity. Competition among potential buyers to secure their next home is now more than double what it was this time in 2019. To be in pole-position in the race for the best property you need to have greater buying power than the rest of the field. That traditionally would mean deeper pockets to outbid other buyers, but in the most competitive market ever, today’s ‘power buyers’ also need to have already found a buyer for their own property, or to have no need to sell at all. Agents report that buyers who have yet to sell are being out-muscled by buyers who have already sold subject to contract. Proof that you are mortgage-ready or can splash the cash without needing a mortgage will also help you to get the pick of the housing crop.”
The new record of £338,642 beats the previous high set in July by just £15, and such a small increase is a sign of a stabilisation of the pace of price rises. Buyer demand remains very strong, but this is counterbalanced by increasingly stretched buyer affordability, disappearing stamp duty incentives and the summer holiday mini-lull, alongside sluggish price growth in London. While five areas of Great Britain (South West, Wales, East Midlands, East of England and South East) have annual price growth in excess of 8%, Greater London has seen better supply of homes for sale than the rest of the country, contributing to a rise of just 0.8%. The scene is now set for a better-balanced autumn moving season, with some early signs of a much-needed increase in the number of properties coming to market. In the first two weeks of September, the number of new listings is up by 14% compared to the last two weeks of August. In turn more choice of properties encourages more current owners to come to market if they are looking for an onward purchase, and this greater liquidity is another factor in easing further upwards price pressure.
Bannister says: “This 14% increase in the number of new sellers coming to market in the first half of September is only an early snapshot, but autumn is traditionally a busy period, as those owners who have hesitated thus far during the year see the few months before Christmas as an opportunity to belatedly get their moving plans underway. The frenetic pace of this year’s market may also have put some potential movers off, but there are signs of a return of some normality. It’s still a strong sellers’ market in most of the country, so those looking to purchase need to do all in their power to maximise their appeal to sellers, who will often have several offers, and will usually choose the one that gives them the best chance of a quick sale. Agents are reporting that the most successful buyers are using tactics such as ‘sell before you buy’ to increase their buying power in this competitive market. Estate agents know the best methods for movers to secure their ideal properties, so it’s well worth discussing your options with them.”
Glynis Frew, CEO of national estate agents Hunters, said: “Even with the window of stamp duty savings in England slipping away as 30th September approaches, demand is roaring with buyers who lost out on properties earlier in the year desperate to secure their move, even if they do have to pay more in stamp duty. While the Autumn may be slightly quieter, the desire to change our lifestyles due to the pandemic and new working trends isn’t likely to fade, so we anticipate activity levels remaining higher than usual. Large deposits and no chain have always been preferable, but this has been amplified in the current market. With so much competition, sellers can easily discount those who aren’t in the most powerful position to proceed on a purchase. It is imperative that buyers have their finances lined up before making an offer.”
Peter Woodthorpe, Director at Readings Property Group in Leicester, said: “Sales are continuing strongly despite the end of the stamp duty holiday. The main issue is lack of stock. We are also seeing some examples of properties being overpriced, distorting the market by reducing the number of saleable properties further. Potential sellers are reluctant to list their homes before they have found somewhere to buy, but realistically, securing that property is almost impossible unless they already have a buyer of their own lined up. More sellers need to allow us to find buyers for them on a subject to contract, no sale no fee basis, which in turn will increase the volume of property on the market to everyone’s advantage”
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.