Spring home buyers are facing the highest ever prices demanded by sellers, with the average price tag on a home having jumped by nearly £7,000 in the space of just a month.
Across Britain, the increase of £6,733 or 2.1 per cent month-on-month pushed average seller asking prices to a new record high of £327,797 in April, Rightmove said this morning, adding that properties are being snapped up at a record speed.
This was more than £4,000 higher than a previous record set last October.
The average asking price for larger ‘top of the ladder’ family-sized properties jumped by more than £18,000 month-on-month, from £571,983 in March to £590,293 in April.
Top of the ladder homes are made up of houses and flats with five bedrooms or more as well as four-bedroom detached properties.
Sold within 45 days
In the first two weeks of April, estate agents were marking homes as sold in 45 days on average and nearly one in four (23 per cent) properties that had a sale agreed in March had been on the market for less than a week.
Both these figures were the highest that Rightmove had ever recorded.
Rightmove said the “mass market” of two- and three-bedroom semi-detached homes tend to be selling the fastest, with 30 per cent of those that are being marked as sold by agents having been on the market for less than a week.
The recent extension of a stamp duty holiday, the return of some low-deposit mortgages, optimism over the coronavirus vaccination rollout and a shortage of properties for sale have pushed up house price momentum, explained Tim Bannister, Rightmove’s director of property data.
“This is only the second time over the past five years that prices have increased by over 2 per cent in a month, so it’s a big jump, especially bearing in mind that the lockdown restrictions are still limiting the population’s movements and activities,” he said.
Wednesday 7 April record
The fast pace of the current market means that each week another activity record on Rightmove tumbles, Bannister noted.
“Wednesday 7 April set a record of over 9.3m visits to Rightmove, and March saw time spent on the site surpass two billion minutes in a month for the first time,” he said.
“This spring surge means that it’s a good time to come to market and achieve a good price and a quick sale, especially if you don’t have an onward purchase.”
“Housing market activity remains high in Scotland where there has been no extension to the land and buildings transaction tax holiday which has now come to an end, which suggests that the same could happen when the tax holidays start to come to an end in England and Wales from the end of June.”
“These rising prices will cause some buyer affordability challenges, as mortgage lending criteria are still constrained, and the record low available stock proportion will make it difficult for buyers to find the right property.
“Being able to act quickly when the right one does come along is vital, so having both a mortgage agreed in principle and your own property already sold subject to contract will help to get you to the front of the queue if you’re looking to buy this spring.”
Richard Freshwater, director at estate agent Cheffins, said: “On average, every house we put on the market at the moment sees over 40 requests for viewings, all from buyers who are in the position to move.
“The amazing thing as well is that this level of interest is throughout the market at all price levels, with demand for large country homes at the same rate as the more affordable, smaller city-based options.
“As competition is fierce, sealed bids have become the order of the day, with over 25 per cent of sales since February conducted by Cheffins ending up in a best and final offers situation.
“A good example of this would be a five-bedroom house in Great Shelford, just outside of Cambridge, which saw 27 viewings in just over a week, 12 offers and eventually sold for well over the asking price.
“Clearly, this level of competition has led to quickly rising prices in the local area and this trend is set to continue throughout the summer months.
“Many sellers are currently holding fire on putting their houses on the market until they have had their second Covid vaccination, and with this in mind, once the vaccine rollout gets into its later stages I would expect to see a good number of properties hit the market as people look to get on with selling.”