"This is only the second time over the past five years that prices have increased by over 2% in a month, so it’s a big jump"
House prices have risen to a new record high and properties are selling at the fastest pace ever recorded, according to the latest Rightmove house price index.
Its figures show that the average price of property coming to market hit a new all-time high of £327,797, following a 2.1% monthly jump. This figure shatters the previous record, set in October last year, by over £4,000.
The number of sales agreed is up by 55% on same period two years ago, reducing the stock of properties that are available to buy to the lowest proportion ever recorded. 145,000 properties were newly marketed this month, but Rightmove says this is still not enough to meet buyer demand.
Rightmove says the 'buying frenzy' for new stock has pushed the average number of days to sell a property to its lowest ever level and the number of houses selling within a week to its highest ever level.
Two and three-bedroom semi-detached houses are being snapped up quickest, with 30% of those that are being marked as sold by agents having been on the market for less than a week.
Rightmove says this is now the fastest-selling market it has measured since its records began.
Tim Bannister, Rightmove’s director of property data, said: “This is only the second time over the past five years that prices have increased by over 2% in a month, so it’s a big jump, especially bearing in mind that the lockdown restrictions are still limiting the population’s movements and activities. The property market has remained fully open, and is fully active to such an extent that frenzied buyer activity has helped to push the average price of property coming to market to an all-time high.
"The stars have aligned for this spring price surge, with buyers’ new space requirements being part of the constellation alongside cheap mortgages, stamp duty holiday extensions in England and Wales, government support for 95% mortgages and a shortage of suitable property to buy. There’s also growing optimism due to the vaccination roll-out, which is helping drive the momentum for a fresh start in fresh surroundings.
"It does mean that this spring’s buyers are facing the highest ever property prices, though with properties selling faster in the first two weeks of April than ever previously recorded by Rightmove at an average of just 45 days to be marked by the agent as sold, it seems that those buyers are not deterred. Almost one in four (23%) properties that had a sale agreed in March had been on the market for less than a week, which is also the highest rate that we’ve ever recorded. If you’re looking to buy in the current frenetic market then you need to be on your toes and ready to move more quickly than ever before.”
Director of Benhham and Reeves, Marc von Grundherr, commented: “The top end of the market is driving current performance with the strongest rates of house price growth and, unlike the regular market, this train is unlikely to come off the tracks when the stamp duty holiday expires.
"While a considerable cash saving in stamp duty tax is nice, it’s not the driving force behind prime property purchases and so we’re not seeing the mad scramble to complete that is causing havoc in lower price tiers.
"It’s very much a case of the hare and the tortoise in this respect and while the general market is sure to run low on steam come the end of the year, the high-end market is likely to keep moving forward at a strong and consistent pace.
"We’re seeing this in London more than anywhere at present, having lagged behind and, in fact, suffered to the greatest extent over the last year, the market is now starting to turn and at a pace that will ensure a cleaner bill of health come September and beyond.”
Tomer Aboody, director of MT Finance, added: "A combination of lowest-ever interest rates, high loan-to-value mortgages, stamp duty relief and government stimulus, along with a year of on-and-off lockdown, has pushed demand for property to record levels. If now isn't the time to buy, then when is? Will we have such an appealing time to buy again, who knows? But with so many positive reasons to buy and people simply needing more space, this trend is set to continue in the short term at least.
"Interestingly, London price changes vary depending on the distance to Central London, with the closest boroughs experiencing minimal-to-no growth over the past year, with some even seeing prices reduce. This can be put down to the high property values already seen in these boroughs and the lack of people being able to buy, whereas further out is still affordable and demand therefore higher.
"You will get very little for less than £500,000 in the most central London boroughs, so the stamp duty holiday is purely a bonus rather than a reason to buy. The Treasury should consider the introduction of stamp duty relief for downsizers as one way of encouraging the release of some much-needed stock onto the market."