Asking prices have climbed by £5,767 or 1.8% over the past month to reach a new record of £333,564 in May, the latest index from Rightmove has found.
Average prices across the UK were also up by 6.7% compared to March 2020, with no direct annual comparisons were available due to the fact the property market was in lockdown a year ago.
London prices have remained almost flat since the first lockdown, edging up by just 0.2% since March 2020 to £640,373.
Wales has seen a sharp jump of 13% over the same period, with average asking prices now £225,161.
In the North West prices climbed by 11.1% £223,446 and in Yorkshire & the Humber they rose by 10.5% to £216,614.
Average London house prices are 2.9 times higher than prices in the northern areas and although still large, this is the smallest ratio recorded by Rightmove since 2013.
While the number of new properties coming up for sale is at a similar level to the long-term average, demand continues to massively exceed supply, especially in northern regions and in the market for family homes.
Rightmove director of property data Tim Bannister says comments: “Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions.
“Buyer affordability is increasingly stretched, but there’s obviously some elasticity left as many buyers are squeezing their way into higher price bands.
“This high demand, with both willingness and ability to pay more, has pushed the average price of property coming to market to a new all-time high of a third of a million pounds.”
Bannister adds: “There appears to be more headroom in buyers’ budgets among those looking to upsize.
“Family homes with three bedrooms or more are like gold dust in many areas of the country, especially in parts of the north.
“For example, compared to the same period in 2019 agents in the North East have 59% less available stock for sale in the ‘second-stepper’ sector made up predominantly of three bedroom homes, while Scotland is 65% down in the ‘top of the ladder’ four bedroom or more sector.
“In contrast London’s available stock is down 20% and 24% respectively in these sectors, so while supply is still limited it is more closely matched to demand.
“Another important factor driving the higher demand and quicker average time to sell in the north is that more of their sellers are intending to buy and stay local, whereas many Londoners are looking to move out.
“Rightmove research among those intending to sell in the next 12 months shows that an average of 84% in the north are looking to move locally, compared to only 52% in London.
“The pandemic has changed many aspects of what people want from their homes, and the pricing pendulum is swinging away from London towards the north.”
Yorkshire-based estate agent Manning Stainton’s managing director Mark Manning says: “Across our region we are seeing a continued surge in the volume of new buyers entering the market.
“Of particular note is the vast number of those buyers arriving from other destinations around the country, particularly the south.
“This surge in buyer activity combined with a relative shortage of new properties coming to market has had the inevitable effect of creating a significant surge in prices with buyers clamouring to get their hands on most listings that hit the market.
“We can see little sign of this abating and would predict that even with the end of the present stamp duty incentive that prices will continue to rise through the rest of this year and likely beyond.”
Munday’s Estate Agents managing director Becky Munday, based in London, says: “People are now prepared to go even further in their race for space, with many more no longer chained to traditional commuter barriers or southern cities. “In London we’re seeing immediate knock-on effects of a working-from-home culture take hold, coupled with the vanishing act of most international buyers who have part supported and underpinned the capital’s economy.
“That will take time to recover from, but a slight correction in prices for a city that has previously seen incredibly high values achieved is not all bad.
“It has created genuine opportunity for domestic buyers to upsize or choose an area or home which suits their needs better, with local families affording the space.
“Most buyers we see in London are local, with properties selling within a few weeks and often attracting multiple bids; in the past week we’ve had three ‘best and final’ scenarios.
“House price growth in London might be slow and steady, but transactions remain buoyant.
“Buyer demand shows no sign of abating and may well increase once international travel resumes and the overseas market can return.
“I have never seen a sellers’ market quite like it.
“The window of opportunity for sellers may be closing soon, however, as a wave of newly vaccinated homeowners – who feel more confident about listing their homes now the virus is under control – is set to join the house moving frenzy and level up the playing field.”
Original Article from Mortgage Strategy 17/05/2021