Zoopla has reported that the average price of property coming to market has hit a new record for the fourth consecutive month, rising to £367,501.
This month’s increase of 2.1% (+£7,400) is the highest at this time of year since May 2014, and marks a national jump of £55,551 in asking prices in the two years since the housing market shut due to the pandemic.
This compares to a rise of just £6,218 in asking prices in the two years before the pandemic, and Zoopla says illustrates how the “frenzied” market activity has led to two-year price growth in cash terms never before witnessed in over 20 years of tracking prices.
This fourth consecutive price record comes alongside a fourth successive interest rate rise, but Zoopla says this rate rise and other household economic concerns do not appear to have dented the motivation and urgency to move that are felt by many, though there are signs that the market is starting to ease.
The number of buyers contacting estate agents is 14% down on the stamp-duty-fuelled market of this time last year, but is up by 31% on the more comparable market of 2019. The number of properties available to buy is 55% down on the levels seen in 2019, meaning that supply and demand look likely to remain out of kilter for at least the rest of the year. The number of sales agreed is up by 12% in the year to date compared to 2019 even with restricted choice, though is down 17% compared to the exceptional market of the same period last year.
Zoopla says these numbers suggest that a lack of homes for sale rather than a lack of desire from buyers is what is dictating the pace of the market. New stock is most urgently needed in the mid-market sector of two and three bedroom semi-detached homes, which are seeing the most competition from buyers.
Tim Bannister, Rightmove’s director of property science, said: “People may be wondering why the housing market is seemingly running in the opposite direction to the wider economy at the moment. What the data is showing us right now is that those who have the ability to do so are prioritising their home and moving, and the imbalance between supply and demand is supporting rising prices.
“Though demand is softening from the heady levels we saw this time last year, the number of buyers enquiring is still significantly higher than during the last ‘normal’ market of 2019, while the number of homes for them to choose from remains more constrained. We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year, and a combination of more supply of homes and people weighing up what they can afford will help to moderate the market.”
Stuart Wilson, chief executive at AIR, added: “Although house price growth is showing signs of slowing, high buyer demand and a limited supply is still lifting average property values, albeit not at the rapid pace we saw during the early months of the post-pandemic market. However, the buoyancy of the market is a welcome indication of the UK housing market’s resilience, which is attractive to lenders and prospective homeowners alike.
“Looking ahead, with inflation at its highest level in forty years, over-55s may decide to take advantage of the current boom by tapping into their equity. While borrowing needs to work for both their short as well as their long term finances, older clients will not only reap the reward of a spike in property value but could even gift some of the unlocked equity to help a younger relative step onto the housing ladder.
“With customers navigating a variety of needs, the role of the adviser is becoming ever more important in today’s economic environment as they are equipped to provide the best possible support for the over-55s exploring their financial options.”
