Record high price is up 0.8% (+£2,807) in the month
The average British house price has hit a record high of £375,131 as pent-up demand from would-be buyers who paused their plans last year leads to price rise, reports Rightmove in its House Price Index report for May, published this week.
The report says that the record high price is up 0.8% (+£2,807) in the month, as the momentum of the Spring selling season causes some modest upwards price pressure.
Rightmove also says that the UK housing market remains price-sensitive with average asking prices just 0.6% up on a year ago. The top-of-the-ladder sector, made up of four-bedroom detached and five-bedroom-plus properties, is still leading price rises, with average prices up by 1.3% against last year. A lack of available homes for sale in this sector during the Covid years, together with the quick rise, and subsequent volatility of mortgage rates in the post-mini-Budget period, meant that activity in this sector was particularly susceptible to some would-be movers taking a step back. Now, with mortgage rates more stable although still high, and greater buyer choice, many who had postponed their moving plans in this sector appear to be returning.
New sellers coming to market
The amount of sales being agreed during the first four months of 2024 is 17% up on last year, outstripping the 12% rise in the number of new sellers coming to market.
Rightmove goes on to report that despite these positive indicators for larger transaction levels this year, the “painful average” of 154 days from a sale being agreed to legal completion remains a challenge for both agents and movers.
With 62 days being the average time needed to find a buyer before the legal process begins, would-be sellers hoping to be in a new home ready for Christmas need to be taking action now.
Price correctly at the start
Rightmove’s analysis shows that properties that require an asking price reduction take more than three times longer to find a buyer than those that do not, giving the sellers who price correctly at the start the edge in selling more quickly.
May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years.
Tim Bannister, Rightmove’s Director of Property Science, said: “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. However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price. The top-of-the-ladder sector is still leading the way, while 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 home-buyers is still stretched.”
Rightmove anticipates the number of completed sales transactions this year to reach in the region of 1.1 million.
The sluggish completion process in England is an issue that parliament is reviewing as part of its inquiry into improving the home buying and selling process. When compared with international housing markets, England’s average completion times are significantly slower, highlighting the significant room for improvement. The creation of a more seamless process, including providing more accurate information about a home sooner to potential buyers, and better connecting the parties involved in the transacting process through technology, are two areas of improvement that Rightmove suggests would be most beneficial to movers.
Quicken up a sale
One strategy that Rightmove’s data has identified as providing sellers with the edge to quicken up a sale, is to work with an estate agent to price competitively from the beginning and avoid the need to reduce the asking price after coming to market. It takes on average 32 days for a sale to be agreed for a property that is priced right from the outset, less than a third of the 112 days that it takes if the home requires an asking price reduction before it has found a buyer.
Tim Bannister commented: “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. 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.”
Thinking of selling? Book a free valuation
With the positive signs in the housing market, now could be the perfect time to get your home on the market, to take advantage of the increase in prices.
Preston Baker would be happy to give you a free, no obligation valuation.
We work relentlessly to get the best outcomes for home sellers, and our unique Property Launch model is proven to sell homes for more and quicker than more traditional methods.
We can also help you find your onward move, including homes that are not yet on the market.
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