Confident house sellers are attempting to reap the rewards of a ‘Boris Bounce’ as they push average property asking prices back to near their all-time high.
The average newly-listed home price rose £2,589 in the month to mid-February, or 0.8 per cent, to £309,399 – just £40 below the previous record high reached in June 2018.
Renewed optimism after the election, along with the return of potential buyers who had put moves on hold, has led to the traditional spring house hunting bounce arriving early.
However, agents have warned sellers not to be over-optimistic. Lucian Cook, of Savills said they need to be ‘pragmatic on price’, as ‘the vast majority of buyers remain unwilling to increase their budgets’.
Rightmove said average asking prices for newly-listed homes rose across all areas except the East Midlands in the month to mid-February
The average asking price is up 2.9 per cent over the past year, according to Rightmove.
While rising prices may cheer some sellers, many will see it as a problem as it makes it harder to get onto the property ladder or move up it.
House prices are already near record levels when compared to wages, according to Nationwide Building Society figures.
‘Sellers must not get carried away’
Rightmove director Miles Shipside said:’It’s the first time for over a year that we have seen any sign of a return of seller confidence, albeit lagging behind the surge in numbers of early bird buyers.
‘Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.
‘However, sellers should be careful not to get carried away with their pricing, as this is still a price sensitive market with stretched buyer affordability.
‘Those who over price risk missing out on the window of increased activity that could run at least until we approach the next Brexit deadline at the end of the year.
‘Now could be an excellent time to get on the market and sell, seizing the opportunity of achieving a quick sale at a decent price.’
Rightmove said the number of people putting their home up for sale has not kept up with the rise in potential buyers, with sales agreed up 12.3 per cent annually, as properties that had been sitting of the market go under offer, but new properties listed up 2.1 per cent.
Figures are flattered by annual comparisons with 2019, which saw the slowest start to the year for the property market in six years.
But Rightmove said there is evidence of a burst interest from home buyers with sellers more cautious but increasing too.
Rightmove said there has been a boom in buyer demand, with traffic to its website hitting a new record of more than 152 million visits in January.
Other property websites have also recently reported surges in activity at the start of 2020.
Rightmove’s report said that as market momentum continues to build ahead of the spring moving season, a series of new price records is likely in the coming months.
The report said: ‘There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month.’
The 0.8 per cent average asking price rise in February was considerably lower than the 2.3 per cent recording in January, but annual asking price inflation picked up to 2.9 per cent
Asking prices have climbed back towards the all-time high seen in the summer of 2018
It added: ‘Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.
‘After three and-a-half years of Brexit uncertainty, dither and delay, many now seem to have the 2020 vision that this is the year to satisfy their pent-up housing needs.’
While new seller numbers are outstripped by buyer interest, it is the first time that Rightmove has seen a year-on-year rise in new supply for 13 months.
Lucian Cook, head of Savills residential research, said: ‘Since the election we’ve certainly seen a significant uptick in new buyer demand in the prime market which creates a real opportunity for sellers while stock for sale remains relatively low. Increased confidence is translating into increased activity, both in the prime market and across the wider market as a whole.
The vast majority of buyers remain unwilling to increase their budgets
‘It is clear that the market remains largely dictated by sentiment. Our own agents are reporting that the vast majority of buyers remain unwilling to increase their budgets.
‘Accordingly, our advice remains that sellers need to remain pragmatic on price, particularly given some of the uncertainty around an impending budget, the first of the new Government
Estate agents have warned that buyers will not stomach substantially higher prices, so the early 2020 bounce not continue
Mortgage lenders have continued to chop rates to attract those buying and re-mortgaging, with many big banks and building societies keener to grown lending than people are to borrow.
HSBC, which has been aggressively growing mortgage market share, last week reduced fixed rates.
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