Residential  

Property price growth forecast to reach 7%

Property price growth forecast to reach 7%
 Credit: Jason Alden/Bloomberg

The average asking price of a property is up 1.1 per cent this month, reaching a national record of £323,530, according to Rightmove.

The average asking price in October was 5.5 per cent higher than a year ago, seeing the highest annual growth rate for over four years, the property portal added.

It has also forecast the annual growth rate to peak at circa 7 per cent by December.

Tim Bannister, director of property data at Rightmove, said: “Many buyers seem willing to pay record prices for properties that fit their changed post-lockdown needs, though agents are commenting that some owners’ price expectations are now getting too optimistic, and not all properties fit the must-have template that buyers are now seeking.

“Not only is the time left to sell and legally complete before the 31st March stamp duty deadline being eaten away by the calendar, but more time is also needed because the sheer volume of sales is making it take longer for sales that have been agreed to complete the process.

“Sellers and their agents should therefore be wary of being too optimistic on their initial asking price, as whilst activity levels continue to amaze there are some signs of momentum easing off from these unprecedented levels.”

MonthNational average asking priceMonthly changeAnnual change
October 2020£323,530+1.1%+5.5%
September 2020£319,996+0.2%+5.0%

Marc von Grundherr, director of Benham and Reeves, commented: “There’s no doubt that this extraordinary market revival has put UK homesellers back in the driving seat, with huge levels of buyer demand boosting asking prices considerably.

“This demand is being driven by the desire for more space and larger homes. However, it seems as though some sellers are starting to push their luck in this respect, with anyone and everyone increasing their asking price expectations whether or not it can be justified.”

Last month the property portal found that asking prices in the second-stepper sector of three- or four-bedroom homes hit a new record of £291,618, fuelled by buyers looking for more space, such as to work from home.

Sales up year-on-year

Rightmove also found an increase of 2 per cent in agreed sales so far this year, compared to the same period in 2019, despite the lockdown that had effectively closed the property market between late March and mid-May.

According to the property portal, this showed new demand “continuing at pace”, in addition to pent-up demand created by the lockdown.

It also noted that for the first time ever, estate agents now had more properties marked as sold than available for sale.

Additionally, the number of sales reported by agents was 70 per cent higher than in the same period a year ago.

Hugh Wade-Jones, managing director of Enness Global Mortgages, commented: “The one downside to such monumental market activity is the frustrating situation many buyers are finding themselves in at the back end of the transaction process. 

“Having had an offer accepted in extremely hot market conditions, it’s now taking months on end to see that offer move through the legal process to completion.