UK house prices have risen at the highest rate on record following a post-election bounce, new research has revealed.
Rightmove’s monthly house price index has registered a huge 2.3 per cent (+£6,785) surge in the price of property coming to market, the largest monthly rise the portal says it has ever recorded at this time of year.
This property price boom is almost certainly the result of post-election optimism returning to the house price market following years of uncertainty as the UK struggled to leave the EU.
This increased optimism has released three years of pent-up demand as would-be buyers judge now is a good time to buy. This has led to Rightmove seeing:
- Over 1.3 million buyer enquiries since the election, up 15 per cent compared to the same period a year ago, suggesting an active spring market ahead
- Four per cent growth in the number of sales agreed, as ‘early birds’ act quickly
Furthermore, in the period from 13 December 2019 to 15 January 2020 – immediately after the election – enquiries to estate agents were up by 15 per cent compared to the same period a year ago, leading to a 7.4 per cent increase in the number of sales agreed over the same period.
People have been waiting for stability, and the moment it arrived, confidence in the market has increased significantly.”
London prices also setting records
In addition to the national house price boom, this month’s 2.1 per cent rise in new seller asking prices in London is the largest that Rightmove has recorded at this time of year in the Capital since it started its House Price Index in 2002. This has helped to push the annual rate of increase to 3.1%, the highest level in more than three years.
Miles Shipside, Rightmove director and housing market analyst, commented:
“Whilst a substantial rise is the norm in January, buoyed by the start of a new year, this is the biggest new-year price surge that we have ever recorded. While there may well be more twists and turns to come in the Brexit saga, there is now an opportunity for sellers to get their property on the market for a spring move unaffected by Brexit deadlines. For those who can afford to move and have been putting it off, now would appear to be a good time to get a view from a local estate agent on their property’s value and a mortgage quote for the great fixed-rate deals that are currently available.”
Mark Manning, managing director of Yorkshire-based Manning Stainton, agreed the property market is rallying: “In December just gone, we sold more properties than in any other December since 2004, which was huge. We’ve now seen a 15 per cent increase in home-owners looking to sell and things are picking up.”
First-time buyers facing all-time highs
One of the positive features of the market last year was the high percentage of first-time buyers taking the plunge. However, their strong desire to get onto the housing ladder and the lack of supply of new properties coming to market meant first-time buyers faced all-time highs in the price of properties in their favoured sector. For example, newly marketed properties with two bedrooms or fewer have risen to a national average asking price of £193,103.
Shipside, explained: “First-time-buyer activity has remained strong, buoyed by cheap interest rates and the high costs of renting. The downside of this high demand is upwards price pressure, with the average price of typical first-time buyer property hitting a new record high. However, the annual rate of increase remains fairly modest at 1.6%, less than the rate of growth in average earnings, so affordability has actually improved a little for first-time buyers.”
Marc von Grundherr, a director at Benham & Reeves in London, summed up the property market as a whole: “We have absolutely seen a post-election bounce, quite substantially actually. People have been waiting for stability, and the moment it arrived, confidence in the market has increased significantly.”