Asking Prices for UK Homes Rise for Sixth-Consecutive Time, as Supply Issues Begin to Ease

New data from Rightmove shows the average property listed at £369,968, but number of sellers is up 13%

Simon Bath, CEO of iPlace Global, the creators of Moveable, and David Hannah, Group Chairman at Cornerstone Tax explain why the housing market is set for a slowdown

The average asking price of a UK property has hit a new record, but there are tentative signs of a slowdown revealed in the latest monthly figures from Rightmove. The average listing price now stands at £369,968 – representing a 9.3% increase in the past year as mortgage costs rise sharply for first-time buyers. However, a slowing pace of growth can be attributed to a better balance between supply and demand, with Rightmove's data also showing a 13% increase in the number of sellers compared to this time last year. Whilst having more new sellers this month has helped alleviate competition for first-time buyers and provided a much-needed injection of stock, demand still remains high. The Bank of England's withdrawal of the affordability test is also expected to contribute to increased demand and rising prices

First-time buyers are likely to be worst affected by these continuing rises, with the average monthly mortgage payment up by 20% (£163) since the start of the year – now at £976 a month. This is due to consecutive rises of interest rates which have severely affected mortgage deals across nation, with lenders now being forced to provide buyers with longer-term plans. 

Currently, it is taking 150 days on average to complete a purchase after agreeing a sale on a property; this represents 50 days longer than the levels in 2019. This has been caused by a conveyancing log-jam and supply chain issues, with more than 500,000 homes being sold subject to contract - 44% higher than in 2019. Alongside this, 53% of properties are selling at or over their final advertised asking price and 98.9% of properties are achieving their final advertised asking price according to Rightmove.  


Simon Bath, CEO of iPlace Global, the creators of Moveable, comments:
“Rightmove's latest report clearly shows that there is still a strong demand for properties across the country which is continuing to push up prices. However, we are seeing smaller increments in the rise of prices, exhibiting signs that the property market could be on track for a slowdown in the latter half of the year.
 
“In order for house prices to drop, there must be more of a focus in overcoming the supply and demand imbalance. The government's failure to deliver on their promise of 300,000 new homes a year has meant that domestic developers have come to the forefront of alleviating this issue. We are already seeing this through the increase in the number of sellers, and we have proprietary research showing that almost a quarter of millennials are now looking to buy a home to develop, not to live in.

"Hopefully, this can further help to put the brakes on rising prices over the next year, with less competition making it easier for first-time buyers to make their way onto the property ladder. However, the government must also ensure that they create new schemes to replace old ones like Help To Buy – as this will make purchasing a home more affordable even if prices continue to increase."

David Hannah, Group Chairman at Cornerstone Tax, comments:
“UK house prices continue to rise at a staggering rate with the average listing price now standing at £369,968. In the past, factors such as the stamp duty holiday have caused more people to consider buying property. However, due to the increase in average house prices, it has made it more difficult than ever for buyers to purchase their first home. 

"There is hope that more available properties will enter the UK housing market, with Rightmove showing an increase of 13% in the number of sellers compared to this time last year. This could indicate a more manageable supply and demand level and subsequently help slow down the rapid rise of property prices. I also think this is a trend which is set to continue, with more and more homeowners looking to take advantage of the record prices and maximise the amount they can get if they sell their property.”