Records tumble as national house price nears £250k
It’s the fifth consecutive month that asking prices have risen – leaving them some 9.1% higher than this time last year and marking the strongest price start to a year in nine years.
London and the South East meanwhile continue to dominate with the average asking price soaring past £500k in the Capital – more than twice as expensive as the rest of the UK.
Miles Shipside, Rightmove director and housing market analyst, said: “The tumbling of records is being driven by the equity-rich generation with a definite southern bias, though agents in most parts of the country are reporting strong demand for well-priced and decent-quality stock.
“Despite a new national record, it’s not ‘green-shoots of recovery’ across the board, especially for the deposit-strapped mass-market. They must wait patiently until January when the Help to Buy scheme extends to the resale market, unless new homes developers can increase building dramatically this year.”
The average price of property coming to market has risen by 9.1% (+£20,852) so far in 2013, the strongest start to a year since the 10.5% recorded in 2004.
This is the fifth monthly rise in a row, with all regions in positive territory this month. However, sellers in two northern regions, Yorkshire and Humberside and the East Midlands, are still unable to come to market at higher prices than this time last year.
With London sprinting past the £500,000 milestone for the first time with a 3.1% monthly rise to £509,870, a typical home in the capital is more than twice as expensive as the national average.
Outside London and some southern hotspots agents report that the market remains sensitive to price and quality, with buyers willing to take their time to find their ideal home.
Shipside said: “The recession appears to have precipitated a change in buyer behaviour which has left them more choosy and less willing to settle for second-best. Not only are they looking for value and wary of paying over the odds, prospective buyers are also giving thought to ease of resale, a sign that the pain of this financial crisis has left them more mindful of the liquidity of their assets.”
Shipside said lenders were still ‘cherry-picking’ in efforts to improve the quality of their future mortgage book by offering some tantalisingly cheap mortgage rates to those with decent deposits, courtesy of the Funding for Lending Scheme.
At the moment there are fixed rates from 2.34% with a minimum 25% deposit and even interest only options at 2.19% for those with a 50% deposit of at least £300,000 to put down.
The availability of cheap money is key to driving positive sentiment and, with 84% of respondents to Rightmove’s latest Consumer Confidence Survey stating that they felt prices would be the same or higher in 12 months’ time, this seems to be feeding through to home-movers.
However, the pent-up demand is still being frustrated by the restricted supply of fresh property. Rightmove has recorded 3% fewer properties coming to market when comparing the first five months of 2013 to those of 2012. This helped exert the upwards price pressure resulting in this month’s new record asking price.