UK house prices hit all-time high in buying frenzy – Rightmove
Asking prices have increased by an average of almost £6,000 in the space of a month, the latest figures from Rightmove show.
Across the UK, the increase of £5,767 or 1.8% month-on-month, pushed average seller asking prices to a new record high of £333,364 in May, up from £327,797 a month earlier, Rightmove said.
While the level of new properties coming up for sale is at a similar level to the long-term average, demand continues to massively exceed supply, especially in northern regions.
The widening supply-demand imbalance has led to double-digit price increases in some regions, with Wales leading the way – up 13.0%, followed by North West and Yorkshire & the Humber, at 11.1% and 10.5% respectfully.
In contrast, London, which in the past has generally led the way in terms of a boom, has seen the rate of price increase since pre-lockdown March 2020 edge up by just 0.2% on average.
Average London house prices are 2.9 times higher than prices in the northern areas of Great Britain, and although still large this is the smallest ratio recorded by Rightmove since 2013.
Tim Bannister, Rightmove’s director of property data, commented: “Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions. Buyer affordability is increasingly stretched, but there’s obviously some elasticity left to stretch a bit more as many buyers are squeezing their way into higher price bands.
“This high demand, with both willingness and ability to pay more, has pushed the average price of property coming to market to a new all-time high of a third of a million pounds. In another twist, it is the regions of Britain further north that are leading the way, with some degree of catching up between average prices in London and the north.
“While the gap remains very large, with average prices in London still 2.9 times higher than those in the north, this ratio is now at its smallest since 2013. The pandemic has given a greater focus on the home, and in 2020 we saw a surge in southern coastal and rural areas.
“So far 2021 is proving to be the year of the northern mover, not only satisfying their pent-up housing needs, but in doing so also narrowing some of the huge price gap with London.”
Bannister believes that the data suggests that there is, what he describes as “more headroom in buyers’ budgets among those looking to upsize”.
he continued: “Family homes with three bedrooms or more are like gold dust in many areas of the country, especially in parts of the north. For example, compared to the same period in 2019 agents in the North East have 59% less available stock for sale in the ‘second-stepper’ sector made up predominantly of three-bedroom homes, while Scotland is 65% down in the “top of the ladder” four bedroom or more sector.
“In contrast, London’s available stock is down 20% and 24% respectively in these sectors, so while supply is still limited it is more closely matched to demand.
“Another important factor driving the higher demand and quicker average time to sell in the north is that more of their sellers are intending to buy and stay local, whereas many Londoners are looking to move out.”
Rightmove research among those intending to sell in the next 12 months shows that an average of 84% in the north are looking to move locally, compared to only 52% in London.
“The pandemic has changed many aspects of what people want from their homes, and the pricing pendulum is swinging away from London towards the north,” Bannister added.
Source https://propertyindustryeye.com/uk-house-prices-hit-all-time-high-in-buying-frenzy-rightmove/