Market remains price-sensitive, posting annual growth
The average price of property listed for sale rose by 0.8% this month to a new record of £375,131, according to property listing platform Rightmove.
The increase, equivalent to £2,807, was attributed to the Spring selling season, with May having a typically strong month for price growth, with new records set in 12 of the past 22 years.
Price growth continues to be led by the largest homes, with the top-of-the-ladder sector seeing prices rise by an average of 1.3% compared to last year. Despite this, overall average prices are only 0.6% higher than in May 2023.
“Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the base rate up to 5.25%, where it has remained since August 2023,” said Tim Bannister, director of property science at Rightmove. “However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price.
“From a regional perspective, the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth. However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many homebuyers is still stretched.”
The latest Rightmove House Price Index also shows that increased buyer and seller activity has been driven by pent-up demand, despite high mortgage rates. Sales agreed between buyers and sellers in the first four months of the year are up 17% compared to the same period in 2023, outpacing a 12% rise in new listings.
Rightmove anticipates around 1.1 million completed sales transactions this year. Their data indicates progress towards this target, but the average time to complete a sale – between agreeing and legal completion – remains lengthy at five months. The extended process, from listing to completion, averages over seven months, making now a critical time for sellers aiming to move by Christmas.
The slow completion process in England is under parliamentary review, with a focus on improving the home buying and selling process. Compared to international markets, England’s completion times are significantly slower.
Rightmove suggests that providing more accurate information earlier to potential buyers and better connecting parties through technology could help improve the process. Properties priced correctly from the outset take an average of 32 days to sell, compared to 112 days for those that require a price reduction.
“We expect that the improved market activity levels and conditions this year will result in higher transaction numbers at the end of 2024 than last year,” Bannister said. “However, the extremely lengthy legal completion process is a frustrating barrier to home movers converting agreed sales into completed transactions more quickly.
“It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market.
“One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly.”
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