The average price tag on British homes has hit a record high of £338,462 as the competition heats up among ‘power buyers’, according to new figures.
Average asking prices for homes increased by 0.3 per cent, or £1,091, month-on-month in September, according to figures from Rightmove.
Wales, South West England, the East Midlands, the East of England and the South East – are experiencing annual asking price growth of more than 8 per cent.
Fierce competition continues among buyers for the low number of properties for sale.
Average asking prices for homes increased by 0.3 per cent, or £1,091, month-on-month in September, according to figures from Rightmove. Pictured: A house on sale for £340,000 in Brighton
Rightmove added that buyers who are ready to move – including those who have already sold their own home, have cash in the bank, or are first-time buyers with a mortgage agreed – are ‘out-muscling’ those who still need to sell their home in order to buy.
The frenzied market activity has helped to push up the average asking price of a newly-listed property to a new record for the fourth consecutive month, according to Rightmove.
The average asking price has climbed £21,389 higher in just six months to £338,447, according to the property listing website’s index.
Rightmove’s Tim Bannister said: ‘We predict that the number of completed sales will be the highest ever seen in a single month when June’s data is released by HMRC.
‘This means it’s likely that the first half of 2021 has seen a record number of moves when compared with the first six months of any other year, induced by the pandemic’s side-effect of a new focus on what a home needs to provide.’
Frenzied activity has helped to push up average property asking prices, says Rightmove
It comes as it was revealed earlier this month that the prices houses are actually selling for are now 13 per cent higher than before the Covid-19 pandemic.
The figures come in contrast to predictions from agents, who thought the end to the Covid-19 stamp duty holiday would see demand for properties dramatically fall and take heat out of the housing market.
The Government’s stamp duty holiday, introduced when the pandemic hit last year, fuelled a rapid rise in house prices, but the stamp duty band was halved from £500,000 to £250,000 from July, and will revert to £125,000 from September 30.
Rightmove said that in the month to mid-July, asking prices rose 0.7 per cent – the equivalent of £2,374 and the largest monthly rise at this time of year since July 2007, at the peak of the boom just before the financial crisis.
The price data is based on Rightmove’s asking prices, while the data on the number of sales is a prediction of what the next HMRC transactions will show, based on Rightmove data that looks at properties being marked ‘under offer’ or ‘sold subject to contract’.
Rightmove attributed the increase to a lack of supply of homes for sale and identified a shortfall of 225,000 homes for sale which, if available, would have helped to maintain a more normal level of property stock for sale and stabilise prices.
This stark shortfall, along with frenzied buyer activity, is fuelling record high prices and leading to record lows in available stock for sale.
The high levels of activity have continued, according to Rightmove, despite the end of the stamp duty holiday.
The stamp duty holiday, which ended on 30 June, saw no tax on the first £500,000 of a property purchase price replaced by none on the first £250,000 until the end of September. Stamp duty is due to return in full after that.
Rightmove said there is an ‘urgent need’ for low stocks of property for sale to be rebuilt so that stability in prices can return.
Rightmove said that the average value of a home in Britain currently stands at £338,462
Mr Bannister said: ‘First-time buyers are currently benefitting from their sector having the most buyer-friendly conditions. Choice is still more limited when compared to the same period in 2019, but price rises are the most subdued of any sector.
‘Saving a deposit is still very hard, but 5 per cent is now an option, and with many paying rising rents, buying your own home on a lower deposit is becoming an opportunity again. The opportunity is also there for property owners to come to market, as it’s still a great sellers’ market despite the recent end of the tax holiday in Wales and its scaling back in England.
‘We’ve also seen a much more efficient housing market over the past year, with the strong buyer demand and faster churn of homes leading to a much higher percentage of sellers finding a buyer for their home, and fewer unsold homes being withdrawn from the market.
‘Buyer sentiment remains strong, and the growth in new households combined with people living longer and having changed housing needs is exacerbating long-term housing stock shortages.’
Rob Sabin, of estate agents Miles & Barr, said: ‘East Kent’s property market continues to be very active during the first six months of 2021 with buyers continuing to purchase the limited housing stock available.
Wales, South West England, the East Midlands, the East of England and the South East – are experiencing annual asking price growth of more than 8 per cent. Pictured: A house on sale for £340,000 in Bristol
‘The number of sellers coming to market has slowed as the year has progressed, which means we’ve seen the level of new listings coming to the market significantly decrease year on year, while in turn total available stock levels across the market is at the lowest we have seen in a number of years.
‘While the number of new listings has dropped, our results remained strong with 945 homes listed accepting an offer. East Kent has also seen the number of buyers looking to relocate to either the countryside or by the coast increase with a fifth of applicants registered coming from Greater London.’
Marc von Grundherr, of estate agents Benham and Reeves, said: ‘The UK property market continues to defy expectation, with house prices reaching yet another record high despite whispers of a decline in values as a result of the tapered stamp duty holiday deadline.
‘There’s no doubt the stamp duty holiday has been the catalyst for this impressive market performance. However, it isn’t the driving factor behind the intent to purchase for UK homebuyers and so a robust level of activity will remain long after it has expired.
‘When you couple heightened demand with a severe shortage of stock, it’s very likely that property values will remain buoyant for the remainder of the year 2021 buyer frenzy reveals 225,000 shortfall in number of homes for sale.’
But property price growth has still seen a ‘surprising’ increase in August, with Nationwide Building Society figures placing it at 11 per cent higher than one year earlier.
However, ONS figures released five days ago suggest the average UK house price dropped £10,000 in July.
The typical home was worth £255,535 in July, according to the Land Registry-based index – around £19,000 higher than a year earlier but significantly below the £265,448 peak in June.
This translated to annual house price inflation slowing to 8 per cent in July, from 13.1 per cent the previous month.
In a reversal of fortune for the property market compared to the recent past, the North East is the UK’s hottest property market in terms of average price rises, with homes up almost 11 per cent in a year, while London is seeing the lowest gains at 2 per cent, ONS figures show.
Rightmove added that buyers who are ready to move – including those who have already sold their own home, have cash in the bank, or are first-time buyers with a mortgage agreed – are ‘out-muscling’ those who still need to sell their home in order to buy. Pictured: A house on sale for £340,000 in Norfolk
Tim Bannister, Rightmove’s director of property data, said: ‘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.
Pictured: A house on sale for £340,000 on Washington Road in Leicester
‘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.’
But there are signs of a re-balancing in the housing market. In the first two weeks of September, the number of new listings was up by 14% compared with the last two weeks of August.
Rightmove said a wider choice of properties should also encourage more homeowners to come to market as the number of potential onward purchases grows.
Mr Bannister continued: ‘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 under way.’