UK asking prices reach new record of £294,834
The price of property coming to the market in the UK this month has hit a new national record, up 0.9% to £294,834, the latest index figures shows.
Demand is being fuelled by cheap borrowing yet supply is limited by some home owners’ reluctance to sell, according to the monthly index report from Rightmove.
The average £2,550 asking price rise is the largest amount seen in the month of September since 2002, driven by price jump in family home sectors of 1.2% while owners of first time buyer properties have seen prices stall with a fall of 1.1%.
Prices at the top end are rising faster with the research showing that the top 15 highest priced counties have all seen values rise this month by double the national average at 1.8%. These counties are all in the higher-priced southern regions which have all risen this month, driven by supply shortages with fewer home owners selling.
The lower priced northern regions have seen prices fall, reducing would be sellers’ ability to raise adequate funds to move and exacerbating supply shortages while overall new seller numbers are down on the same period last year in both the north and the south with a drop of 4.9% and 7.1% respectively.
‘Prices are at an all-time high, yet borrowing is historically cheap and positive sentiment is aided by the ongoing postponement of rate rises from these six-year lows. Demand from those who can afford to buy remains high, and suitable supply remains tight, with the number of properties coming to market down 6% on the same period in 2014,’ said Miles Shipside, Rightmove director and housing market analyst.
‘The result is the biggest monthly price rise seen at this time of year for 13 years. High demand, lack of suitable supply, and increasingly stretched affordability are leading to some extremes in market forces in different sectors and parts of the country,’ he explained.
‘One of the effects is that those who own property that is in most demand, either by type or location, are seeing their values continue to rise. Their properties are rich in features and benefits that others want to buy, and as a consequence they are getting proportionately richer than either owners of less desirable homes or those who are not on the housing ladder at all,’ he pointed out.
It is the typical family home market sectors that have risen most this month. Second stepper and top of the ladder properties, covering all property types with three or more bedrooms, went up by an average of 1.2%. In contrast first time buyer type properties with two bedrooms or fewer fell by 1.1%.
‘This year’s price surge in the first time buyer sector has stalled this month, and has now been overtaken by second stepper homes both in terms of monthly and annual increases. It looks like some of those buying typical first time buyer properties are now struggling to afford prices in this bracket that have on average gone up by nearly £10,000 in the last year, hence new sellers are asking for less,’ Shipside said.
‘Owners of first time buyer properties, often the sector with the least equity, are now finding that the gap to jump up from their first home to the second step on the ladder has got bigger. The top of the range also accelerated upwards this month, as the buoyant market momentum that started at the bottom feeds up into higher price brackets as equity-rich home-movers trade up,’ he added.
The report reveals that all four southern regions rose this month, up by an average of 1.3%. The average new seller asking price is higher in all of these regions than in any of the six northern regions. In contrast all the lower priced northern regions fell, with an average decline of 0.9%.
While the north’s negative and south’s positive price outcomes are very different this month, a clear commonality whatever the price trend is that fewer property owners are coming to market. The north’s property listings are down 4.9% this month on the same period last year, with the buoyant south down even more by 7.1%.
Continuing the theme of those owning the more expensive property assets benefitting most from the currently rising property market, the top 15 most expensive counties have all seen price rises this month.
The average increase is 1.8%, which is double the overall national average increase of 0.9% this month. All of these counties are in the south of the country, with Surrey, Hertfordshire, Oxfordshire, Buckinghamshire and Berkshire being the top five most expensive outside London. Another southern county, Bedfordshire, has the highest annual growth of 12.3%.
‘The middle and upper price sectors have increased the most this month. With this growing equity the property rich potentially have more options to move, but if the property they desire is not up for sale or has increased beyond their reach then it seems many are staying put and exacerbating the supply shortages,’ Shipside explained.
‘Many home owners in the north also seem unable to move, though this is as a result of lack of equity growth meaning they may have to wait for some of the southern based price boom over the last five years to ripple up north. All are evidence of the growing demand outstripping suitable supply and housing costs continuing to rise,’ he concluded.