New records for UK house prices continue in Rightmove’s latest House Price Index

The latest House Price Index from Rightmove reports Wales and the North of England have seen continued growth.

The highlights of the index include:

• New records continue to be set as the average price of property coming to market this month jumps by 1.8% (+£5,767), to a third of a million pounds (£333,564)
• Average London house prices are 2.9 times higher than prices in the northern areas of Great Britain, and although still large this is the smallest ratio recorded by Rightmove since 2013
• While London prices have stood still (+0.2%) since the first lockdown, areas further north have seen double-digit increases, due to the shortfall in supply that suits people’s changed needs and lives
• Wales leads the way at +13.0%, followed by North West (+11.1%), and Yorkshire & the Humber (+10.5%)
• The north sees greater imbalance between demand and supply than London, with people more likely to move locally and some more able to afford to upsize

James Forrester, Managing Director of Barrows and Forrester, comments: “Asking prices continue to climb at an alarming rate and this upward pressure is being driven by a number of factors. 

“Buyer demand remains extremely high and an appetite for larger homes is driving market activity. However, a lack of suitable stock to satisfy this demand is causing many to dig deep in order to offer above the odds and secure their desired purchase. 

“At the same time, savvy sellers are realising that buyers are not only entering the market with a budget boosted by the stamp duty holiday, but they’re doing so amidst an air of panic with the deadline fast approaching. Therefore, many are pricing far higher than the market value of their home to take advantage of this desperation. While they will inevitably reduce this expectation during the offers stage, this additional wiggle room still enables them to secure a higher price than they may have otherwise.”

Matthew Cooper, Founder & Managing Director of Yes Homebuyers, comments: “It’s clear that sellers are attempting to cash in on the stamp duty holiday themselves by reaching new highs where unrealistic asking price expectations are concerned. In doing so they’re also crushing the hopes and dreams of many would-be first-time buyers who will now find themselves well and truly priced out of the market.

“It certainly doesn’t help when this hysteria is being driven by the likes of Rightmove, who continue to pull ‘record’ market statistics out of their hat on a monthly basis, much like a cheap magician at a children’s party. 

“Those hard-pressed to reach the first rung of the housing ladder may well have the last laugh though, as an already weary market continues to overheat. When the end of the stamp duty holiday does come and causes buyer demand to evaporate, we’re likely to see property values fall at pace.”

Marc von Grundherr, Director of Benham and Reeves, comments: “With the London property market moving at a steadier pace than the rest of the UK, we’re simply not seeing a spike in asking prices driven by home seller greed. Instead, the market is moving at a far more sustainable pace and while activity is starting to build, transactions are being agreed in a more sensible manner. 

“With the cost of buying at its highest in the capital, those that are transacting are in a strong financial position and so they simply aren’t as motivated by the incentive of the stamp duty holiday. While it’s certainly a nice cherry on top, it isn’t going to make or break their aspirations of homeownership and this more natural return to form will ensure a greater degree of long-term market health.”

Ged McPartlin, Managing Director of Ascend Properties, comments: “The Northern Powerhouse continues to drive overall market performance with the North West and Yorkshire, in particular, steaming ahead with some of the highest increases in property values. 

“The property market balance has well and truly tipped in favour of the North in recent months, driven by the fact that northern regions continue to offer a far more affordable foot on the ladder for homebuyers. 

“While the difference in property prices remains vast when compared to the likes of London, the north-south divide is certainly closing in terms of overall market pedigree.”

Read Rightmove’s full report here: https://www.rightmove.co.uk/press-centre/house-price-index/may-2021/