Thursday, 1 Jun 2023

Average property price tag hits a record high, says Rightmove

British property tenants discuss feeling ‘trapped’ in the rental cycle

The average price of a home hit a record high this month after soaring by £6,647 month-on-month, according to the property website Rightmove.

Across Britain, the average asking price for a home coming to market is now £372,894, it said as it revealed that the 1.8% month-on-month increase was the biggest of the year so far. However, the current “hyper-local” market is still price-sensitive and buyer affordability remains stretched, it added.

Tim Bannister, Rightmove’s director of property science, said: “This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. One reason for this increased confidence may be that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely.

“What is much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years. Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come.

“The market is still very price sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically priced new instructions that are selling best.”

The average discount from the final asking price to the agreed sale price has steadied at an average of 3.1%, in line with pre-pandemic market levels.

The number of buyers making inquiries to estate agents about homes for sale is now 3% higher than at this time in 2019, led by buyers taking their first or second step on the property ladder.

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However, there are signs of some over-optimism in the “top of the ladder” property sector.

While larger properties are still selling faster typically than in 2019, it is now taking an average of 67 days to agree a sale, nearly double the 35-day average at this time last year. Mr Bannister added: “This month’s record price is a strong indication of sellers’ confidence, and we can see from activity levels and the still relatively limited choice of property for sale that this confidence is justified in some segments of the market.

“More discretionary sellers at the top end may be prepared to price high and wait for the right buyer, and whilst it is positive that they appear to feel no financial pressure to sell, the data suggests that some sellers in this sector will need to price more competitively if they want to find a buyer in the current market.”

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