Landlord Knowledge - Home of the Savvy Buy to Let Property Investor

UK Housing Market Hits High Note as Seller Asking Prices Experience Record Increase

A boost in capital values has spurred good cheer among landlords and homeowners alike, as there’s been a significant and unanticipated surge in house asking prices. Data from Rightmove has revealed that the average price leap stands at 1.8 per cent or a typical £6,647 this month, outperforming the historical May rise of 1.0 per cent.

Setting a new high, the average seller asking price now sits at £372,894. This upward trajectory reflects sellers’ growing confidence in a market that has consistently defied expectations since the beginning of the year.

The selling price to the final asking price has settled at an average discount of 3.1 per cent, matching the market levels prior to the pandemic. Buyers’ inquiries to agents about homes for sale are also on the rise, marking a 3.0 per cent increase compared to this period in 2019.

The surge in interest is primarily led by the first-time-buyer and second-stepper sectors, with demand surpassing pre-pandemic levels by six and three per cent respectively.

However, Rightmove warns against a streak of over-optimism surfacing in the high-end market. This segment is experiencing the fastest inflation in prices this month, despite a drop in buyer interest compared to pre-pandemic levels.

While properties in the high-end market are still being sold more rapidly than in 2019, the sale agreement period has lengthened to an average of 67 days – nearly double the average from last year. This delay marks the most significant extension in the time taken to secure a buyer.

Rightmove’s Director of Property Science, Tim Bannister, explains, “This month’s remarkable jump in new seller asking prices is a sign of burgeoning confidence from sellers, and it seems like a delayed reaction since such an increase is usually observed earlier in the spring season.”

Bannister suggests that the pessimistic market predictions for the start of the year now seem increasingly far-fetched. He adds, “What is far more plausible is that the market will progressively revert to more regular activity levels this year after the extraordinary occurrences during the pandemic years.”

Factors such as stabilising mortgage rates and a generally upbeat economic outlook are adding to the overall confidence among sellers. However, Bannister advises caution, stating, “The market remains highly price-sensitive, and new sellers should avoid overpricing initially and then reducing later. Agents report that realistically priced new instructions are the ones that sell best.”