Rightmove has reported a 2.3% (+£6,785) monthly rise in the average price of property coming to market.
Nearly 65,000 properties were marketed between 8 December and 11 January, so most of them came to market after the 12 December election. Rightmove said that given that this is the largest monthly rise it has ever recorded at this time of year, it would appear that many of these new sellers are feeling a surge of optimism.
Buyers are also optimistic, with a jump in demand since the election. In the period from 13 December to 15 January, immediately after the election, enquiries to estate agents were up by 15% compared to the same period a year ago. This then led to a 7.4% increase in the number of sales agreed over the same period.
Miles Shipside, Rightmove director, said: “These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability. The housing market dislikes uncertainty, and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home-movers to hesitate. There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market.
“The early birds are on it, with over 1.3 million buyer enquiries to agents since the election, up 15% on the same period a year ago. Some buyers are even further ahead and have snapped up a property already, with the number of sales agreed up by 7.4% on this time last year.”
This month’s 2.3% rise in new seller asking prices is the largest that Rightmove has recorded at this time of year since it started its House Price Index in 2002. The previous highest January rise was the 2.2% recorded in January 2015. This has helped to push the annual rate of increase to 2.7%, the highest level since July 2017.
Shipside said: “Whilst a substantial rise is the norm in January, buoyed by the start of a new year, this is the biggest new-year price surge that we have ever recorded. However it is still a price-sensitive market, with stretched buyer affordability, so sellers should be careful not to get carried away with their pricing and miss out on this window of increased activity.
“One factor behind the upwards price pressure has been the shortage of property coming to market in many areas of the country, with some would-be sellers postponing their moves until they judge the outlook to be more certain. While there may well be more twists and turns to come in the Brexit saga, there is now an opportunity for sellers to get their property on the market for a spring move unaffected by Brexit deadlines.
“For those who can afford to move and have been putting it off, now would appear to be a good time to get a view from a local estate agent on their property’s value, and a mortgage quote for the great fixed-rate deals that are currently available.”
Rightmove said that one of the positive features of the market last year was the high percentage of first-time buyers. However, their strong desire to get onto the housing ladder and the lack of supply coming to market have now resulted in this year’s first-time buyers facing all-time highs in the price of properties in their favoured sector. Newly-marketed properties with two bedrooms or fewer now have a national average asking price of £193,103.
Shipside added: “First-time-buyer activity has remained strong, buoyed by cheap interest rates and the high costs of renting. The downside of this high demand is upwards price pressure, with the average price of typical first-time-buyer property hitting a new record high.
“However, the annual rate of increase remains fairly modest at 1.6%, less than the rate of growth in average earnings, so affordability has actually improved a little for first-time buyers.”
Tomer Aboody, director of property lender MT Finance, said: “Rightmove is delivering some more good news about a property market which has been stagnant at best for the past three and a half years.
“The uncertainty around Brexit, coupled with three general elections since 2016, has meant that buyers and sellers have long waited to see what happens on the political front. Now we have a majority government which has confirmed that Brexit will finally go ahead, which has sparked off a quick frenzy in the market from waiting buyers.
“The fact that asking prices are rising isn’t surprising, since there are still fewer sellers than buyers. If we look at the trend of when asking prices are at their highest, it tends to be those times when estate agents’ stock is at its lowest levels and demand outstrips supply.
“Next month’s Budget will be an interesting one with regards to possible changes to stamp duty. If the new Chancellor is brave enough to cut stamp duty, it will give the market a boost, encourage downsizers to sell up and persuade more buyers to take advantage of low mortgage rates and get on with a purchase.”