Average price continues to rise
The average price of property coming to market rose for the sixth consecutive record this month, up by 0.4%, or an equivalent of £1,354, to £369,968, the latest Rightmove House Price Index has shown.
Rightmove said a continuing desire to move, and low numbers of homes for sale, has been driving further price growth even at a time when personal finances are becoming increasingly stretched.
Its report revealed that buyer demand continues to exceed historically normal levels and is now 26% higher than at the same time in 2019, although down 7% on June 2021. The number of sellers was up by 13% compared with this time last year, but the number of available homes for sale is still 40% down on where it was in pre-pandemic 2019.
The slow rate of stock recovery has led to Rightmove revising its 2022 price forecast, with 7% annual growth now expected by the end of the year across Great Britain, up from its 5% forecast at the start of the year.
Tim Bannister, director of property science at Rightmove, said that having more new sellers this month is a win-win for the market.
“These sellers will likely achieve good prices for their homes given the sixth asking price record in a row that we’ve now seen, which may help to explain the increase in new stock coming to market over the last year,” he said. “For those looking to buy, it means more choice, and a slight easing in competition against other buyers while the market is still moving very quickly.”
Bannister added that in the current fast-changing economic climate, those who are looking to find a suitable home they can afford, may choose to act now rather than wait.
With a wide imbalance remaining between supply and demand, he said prices look underpinned, and only typical smaller, seasonal month-on-month falls can be expected in the second half of the year.
Read more: Britain’s red-hot housing market about to cool?
The average first-time buyer monthly mortgage payment for someone taking out a two-year fix is now 20%, or £163, higher than at the start of the year, now at £976 per month.
Rightmove said demand is likely to return to more normal levels in the second half of the year due to the rising cost-of-living and affordability concerns – however, the prospect of further interest rate rises may drive some to act now to lock in a longer fixed-term mortgage rate.
“The challenges presented by rising interest rates and the cost-of-living will no doubt have an effect throughout the second half of the year, as some people reconsider what they can afford,” Bannister stated. “However, there is also anticipation among would-be home-movers that personal finances may become even more stretched in the coming months, with further interest rate rises expected and the energy price cap jumping again in October.
“Given the political and economic uncertainty at the moment, those who want to move this year, particularly first-time buyers, may seek some financial certainty by locking in longer fixed-rate mortgage terms now before their monthly outgoings increase again.”
The Rightmove House Price Index is compiled from the asking prices of properties coming on to the market via over 13,000 estate agency branches listing on the Rightmove website.
