Record-Breaking Surge in House Prices – Rightmove Reports
Rightmove’s Report: New Sellers Respond to Market Improvement, Leading to Record High House Prices.
Average Property Price Surges by 1.8% (+£6,647)
Rightmove’s Latest Report: Record High House Prices as New Sellers Seize Opportunities in a Flourishing Market
According to Rightmove’s May 2023 House Price Index report, the average price of properties entering the market has surged by 1.8% (+£6,647), reaching an all-time high of £372,894. This remarkable increase reflects a delayed response to the exceptionally strong housing market activity witnessed since the beginning of the year.
1.8% monthly increase
According to Rightmove’s recent report, the average monthly increase in house prices has reached its highest point of the year so far, with a remarkable surge of 1.8%. This surge is significantly larger than the historic average rise of 1.0% observed in May. Furthermore, the report indicates that agreed sales numbers are currently only 3% behind the pre-pandemic market of 2019, indicating a return to more normal levels.
The report also highlights that the discount from the final asking price to the sale agreed price has stabilized at an average of 3.1%. This figure aligns with typical market levels, reflecting the confidence of home-movers in the future outlook of the housing market.
However, the report cautions that while lower and middle market sectors demonstrate justified price confidence, there are signs of over-optimism in the top-of-the-ladder sector, as some discretionary buyers hold back.
In terms of buyer demand, the top-of-the-ladder properties experience a 1% decrease compared to 2019, while the second-stepper sector shows a 3% increase, and the first-time-buyer sector witnesses a notable 6% surge.
Additionally, Rightmove’s report indicates that average mortgage rates remain stable despite a recent hike in the Bank of England base rate. For instance, an average 5-year fixed mortgage with a 15% deposit currently stands at 4.56%, compared to 5.89% in October of the previous year.
Promising Market Trends:
Increasing Seller Confidence Reflects Positive Market Activity
According to Rightmove, new sellers are now showing increased confidence in the market after a period of caution earlier in the spring. The positive activity, driven by a 3% rise in buyer demand and strong sales numbers, has prompted a jump in asking prices. Rightmove’s Director of Property Science, Tim Bannister, suggests that the market is gradually transitioning to a more normal level of activity, supported by steady mortgage rates and a more optimistic economic outlook. It is emphasized that realistic pricing from new sellers is crucial for successful sales.
Growing Seller Confidence Evident in the Market
According to Rightmove, the record-breaking prices seen this month demonstrate the strong confidence among sellers. The limited property options available and high activity levels support this positive sentiment in certain market segments. While discretionary top-end sellers may choose to hold out for the right buyer, the data suggests that competitive pricing may be necessary for successful transactions. The stability in the mortgage market is also encouraging, providing home-movers with a favorable environment for future planning.