Prices hit record high as new sellers respond to improving market

The average price of property coming to the market has jumped by 1.8% (+£6,647) to reach a new record of £372,894, latest data from Rightmove reveals.

The monthly increase is the biggest of the year so far and is higher than the historic average May rise of 1%.

MAIN POINTS

• This 1.8% monthly increase is the biggest of the year so far, and is significantly higher than the historic average May rise of 1.0%;

• Agreed sales numbers are currently just 3% behind the last more normal pre-pandemic market of 2019;

• The discount from final asking price to agreed sale price has steadied at an average of 3.1%, in line with normal market levels, reflecting home-mover confidence in the outlook for the market;

• Whilst increased price confidence appears to be more justified in the lower and middle market sectors, there are some signs of over-optimism in the top-of-the-ladder sector, as some discretionary buyers hang back;

• Buyer demand is 1% lower than in 2019 for top-of-the-ladder properties, compared with 3% above 2019’s level in the second-stepper sector, and 6% above in the first-time-buyer sector;

• Average mortgage rates are remaining steady despite another increase in the Bank of England base rate;

• An average 5-year fixed, 15% deposit mortgage is now 4.56%, compared to 5.89% last October.

Rightmove’s Tim Bannister says: “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.”

Vicki Foreman, Associate Partner at Norfolk-based Brown & Co says movers are beginning to understand the new market dynamics and are not as deterred by changes to interest rates as they perhaps were a few months ago.

She adds: “Properties that have been on the market for a few months may have gone stale and their asking price out of line with more realistically priced new instructions where many sellers are motivated to sell and in tune with the current market.

DAMAGING

“Starting with too high an asking price, thinking you can always reduce the price later can be damaging to the prospects of a sale.”

And Bruce Patterson, Managing Director at Corum in Ayrshire, adds: “Accurate initial pricing remains key and we’re seeing more sellers set competitive and realistic price expectations for the current market which also makes any overpriced stock stand out.

“We’re still seeing a continuation of people relocating from cities and urban areas to coastal areas, where they make get more space and a bigger property for their budget.”

You can download the report here.