Rightmove has reported rising prices for all types of housing in all regions in its latest survey, which covered the period between 12th September and 9th October.
Earlier this month, Advantage looked at the latest data from the Nationwide, which indicated that a shortage of available housing stock was driving property prices up.
Rightmove stated that the market had delivered a ‘full house’ for the first time since March 2007, hitting price records in all regions and in all property market sectors (which they define as: first-time buyer, second stepper and top of the ladder).
The price of property coming to market has surged past last month’s record and jumped by an average of 1.8% (£5,983) this month. This is the highest per centage monthly rise at this time of year since October 2015.
Buying ahead of a potential interest rate rise
The continued fast turnover of property for sale and a window of opportunity to buy before a potential interest rate rise seem to have overcome the final expiry of all stamp duty incentives and are keeping activity robust.
Tim Bannister, Rightmove’s Director of Property Data, said:
“Competition for property for sale remains hot this autumn, with average prices jumping by almost £6,000 in the month.
“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.”
Shortage of housing stock looks set to continue
Tim Bannister added:
“This ‘full house’ is an extremely rare event, happening for the first time since March 2007. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.
“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”
The number of sales being agreed was up by 15.2% in September compared to the same period in 2019, which is the best ‘normal market’ comparison. This high level of demand is stalling a recovery in the depleted available stock for sale despite a continuing upward trend in properties coming to market.
The latest weekly snapshot shows that the number of new sellers coming to market is still marginally down on the same period in 2019, but only by 3.2% as opposed to 9.3% for the period as a whole. This continuing imbalance, with demand outstripping supply and leading to record prices, presents an opportunity for owners looking to sell and cash out if they are downsizing or not needing to buy another property.
The window is also open for movers who wish to sell and buy again before a likely interest rate rise, which is widely expected as the Bank of England seeks to control resurgent inflation.
Advantage’s view: Although there’s been speculation that the UK’s housing boom could prove short-lived, the continued high level of demand paired with a shortage of housing stock, with no short-term prospect of introducing large volumes of new housing into the market, looks set to continue to bolster prices. Also, as Rightmove has noted, alongside this longer-term issue of under-supply of new housing, the short-term incentive of buying while interest rates are at historically low rates also seems to be creating a sense of urgency for some buyers.
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