Home buyer frenzy pushes average asking price to new high – and experts warn it's not over

The property boom continues across the nation as the average asking price hit a new record high for the fourth consecutive month. Compared to last month, the average asking price has increased by a staggering £2,374 – a monthly change of + 0.7 percent. According to Rightmove, the first half of 2021 saw 140,000 more sales being agreed and 85,000 fewer new listings than the long-term average.

However, the recent surge in market activity has revealed a shortfall of 225,000 homes for sale.

If those homes were available, it would stabilise price growth and shift the current imbalance between supply and demand.

Currently, four-bedroom homes are struggling the most with a 39 percent surge in sales and a 15 percent fall in numbers coming to market.

Meanwhile, three-bed homes have seen a 28 percent jump in sales but have suffered a 10 percent drop in new supply.

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Rightmove’s Director of property data Tim Bannister said the recent change in the stamp duty threshold have also “helped to exhaust the stock of property for sale”.

He added: “This has left prospective purchasers with the lowest choice of homes for sale that we’ve ever recorded, continuing price rises, and stretched affordability.”

Rightmove expects that the number of sales completed in the first six months of the year and due to be reported by HMRC later this week is on course to be around 800,000, which could beat the previous record of 795,000 set in 2007.

But it seems despite demand outstripping supply, positive sentiment is set to continue, according to Rightmove and other property experts.

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According to Chestertons’ latest market analysis, the first six months of 2021 saw the highest aggregate number of sales for any first half year period.

The agency’s 31 offices witnessed new buyer registrations rise by 21 percent, new instructions increase by 46 percent, transaction volumes reach a 142 percent uplift and offers being accepted rise by 41 percent.

Cory Askew, Head of Sales, at Chestertons said the first half of this year has been “incredibly busy” and was led predomininalty by the stamp duty holiday extension and the introduction of “attractive” mortgage packages.

He added: “Although the end of the first taper of the stamp duty holiday has passed, the market is still fuelled by house hunters keen to find a new home as well as city workers who are returning in anticipation of offices reopening.”

Meanwhile, Managing Director of Barrows and Forrester, James Forrester, said he expects property prices to “soar ever skyward” as demand continues to rip through current supply levels.

He explained: “The availability of stock on the market is the lifeblood of the property market and if it’s significantly short in volume.

“As a result, we can expect to see prices soar ever skyward as demand continues to outstrip supply, regardless of the fact that the stamp duty bonanza may have finished.”

Founder & Managing Director of Yes Homebuyers, Matthew Cooper, said the current house price growth may not be sustainable, which has been proven throughout history.

He added further: “The past 12 months or so may well have been good for the property industry and for sentiment overall however caution now prevails as we enter a second year of wildly increasing property values – a bubble if ever there was.

“The spectre of higher inflation and the Bank of England potentially responding with the blunt instrument of an increase in interest rate rather adds to the peril.”

Founder and CEO of GetAgent.co.uk, Colby Short said the time taken to sell a home has plummeted to just 38 days in June, however, this is the time it’s taking to “agree” a sale not complete it.

“Sizeable delays remain at the final stage of the transaction timeline,” he said.

“Now that the support from the temporary stamp duty relief has all but ended, we will inevitably see the market return to normality with demand diluting somewhat, price growth softening and time-to-sell increasing back to 45 to 50 days.”

source: express.co.uk