"The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched."
- Tim Bannister, Rightmove’s director of property
The average price of property coming to the market for sale has risen by 0.8% this month to a new record of £375,131, according to the latest Rightmove figures.
May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years. Price growth is still led by the largest-homes, top-of-the-ladder sector, with prices in this sector up by an average of 1.3% compared with last year. However, since the last price record set a year ago in May 2023, average prices are only 0.6% higher overall, a reminder that the market remains very price-sensitive.
Rightmove says pent-up demand is a key driver behind increased buyer and seller activity, despite mortgage rates remaining elevated for longer than anticipated. In the first four months of the year, the number of sales being agreed between buyers and sellers is 17% higher than in the same period in 2023, outstripping the 12% increase in the number of new sellers coming to market. Like pricing activity, these trends are being driven most by the top-of-the-ladder sector, made up of four bedroom detached and five bedroom plus properties. A lack of available homes for sale in this sector during the pandemic years, together with the rapid rise of mortgage rates in the post-mini-Budget period, meant that activity in this sector was particularly susceptible to some potential movers taking a step back. Now, with mortgage rates more stable, albeit still high, and greater buyer choice, many who had postponed their moving plans in this sector appear to be returning.
Rightmove anticipates the number of completed sales transactions this year to reach around 1.1 million. However, the lengthy time to complete a sale after finding a buyer remains a challenge for both agents and movers. The average time between agreeing a sale and legal completion is a painful five months, or 154 days. In total, it is taking over seven months on average from a seller coming to market to completing their move, meaning that as early as it may seem, would-be sellers hoping to celebrate Christmas in a new home need to be coming to the market about now.
Tim Bannister, Rightmove’s director of property, said: “Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the Base Rate up to 5.25%, where it has remained since August 2023. However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price. The top-of-the-ladder sector is still leading the way, while from a regional perspective the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth. However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched.
“We expect that the improved market activity levels and conditions this year will result in higher transaction numbers at the end of 2024 than last year. However, the extremely lengthy legal completion process is a frustrating barrier to home-movers converting agreed sales into completed transactions more quickly. It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market. One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly.”
