A recent report from Rightmove*, outlined that the rise in house prices across the UK represents an increase in value of £3,398*, with the price of an average home climbing to £371,158 (according to Rightmove’s house price index*.)
This new asking price record shows that once again, the property market exceeds all expectations, even during times of market uncertainty.
There is also little sign of downwards price pressure on existing properties for sale, with the number of reductions up 2% on last month to 23% of all properties reduced, which is still much lower than the pre-pandemic five-year average of 32%*.
Rightmove’s Director, Tim Bannister, comments: “What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues.
"New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average. It will take a bit of time for the market to settle into a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”
The current economic uncertainty has understandably resulted in some prospective buyers pausing their plans momentarily to wait and see how the next few weeks and months play out. However, demand still remains 20%* higher compared to a more normal market of 2019. This trend proves true within the first-time buyer sector, as demand is still up 24%* compared to 2019, proving that buyer confidence has only climbed since the pandemic.
Despite the possibility that some buyers may be awaiting a clearer outlook before their next move, those who have already agreed to their purchase appear to remain committed and optimistic. Only 3.1%* of sales agreed fell through in the two weeks since the mini-budget, which lines up with the 3.0%* over the same two weeks during 2019. UK agents are reporting that those who have managed to secure a mortgage offer at a low rate are rushing to complete their purchase before the offer reaches expiry.
Tim concludes: “The vast majority of buyers who had already agreed to their purchase are still going ahead. Agents report that many of those who managed to secure a mortgage offer at a lower rate before lenders quickly increased them are now rushing through their agreed deal to avoid their offer expiring and facing a higher rate when they come to reapply. It’s understandable that some new movers who have the option to wait may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home.
"With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip supply and supports prices.”
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Rightmove*
