Property: Asking prices hit record high of £336,073 but market pace now ‘slackening’

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The price of property coming to market increased by 0.8 percent this month (+£2,509) as the housing market continues to boom.

However, this is a small rise compared to last month’s 1.9 percent or April’s 2.1 percent.

There are also signs the market is beginning to slow down due to high prices and an all-time low number of available properties.

Tim Bannister, Rightmove’s Director of Property Data said there are “early signs of a slowing in the frenetic pace.”

The coronavirus pandemic and first lockdown last year saw the property market put on hold.

When the market eventually reopened in May 2020, there were huge jumps in the numbers of sales being agreed.

But this is now rising at a much slower pace due to higher prices and a lack of “fresh choice”.

The stamp duty holiday, which was first introduced in July 2020, is also going to be phased out at the end of June.

Mr Bannister said this has “taken away some of the urgency to move”.

The Rightmove property expert said he is expecting the market to “remain robust” but there are early signs of a “slackening in the incredible pace of activity that we’ve seen over the last year”.

He added: “This super-charged activity cannot go on forever, but we expect the market to remain vigorous for at least the remainder of the year.”

The number of homes available for sale per estate agency branch is at an all-time low of just 17.

Shortage of property to buy means sale agreed figures will fall unless supply increases.

Demand is particularly high for detached homes with four bedrooms or more.

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These buyers will remain unaffected by the market’s increasingly high prices.

The number of sales agreed for properties priced over £500,000 was up by 49 percent in May compared to May 2019.

Since March 2020, the housing market across the country has seen an average price rise of 7.5 percent.

However, “top-of-the-ladder” properties have seen a price rise of £67,394.

Louisa Fletcher,’s Property Expert, has commented on the latest Rightmove house price index.

She said: “The slight month on month slowdown in asking price increases may reflect the fact that the ‘seller’s market’ we’ve seen over the past 12-months could be reaching it’s peak.

“As estate agents across the UK continue to report record low levels of available stock, buyer demand still just isn’t matched by available homes for sale at the moment.

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“This is gradually beginning to change, with the inevitable ‘unexpectedly re-available’ properties beginning to appear on property search websites, but it’s currently more of a trickle than a torrent.

“In the meantime, the difficulties faced by potential purchasers continue as the race to view properties and the trend of competitive bidding continues, stretching affordability levels.

“A particular concern is that, as buyers from London and the South East relocate to other areas around the UK due to the increased flexibility they have due to the growth in flexible working, local buyers may be priced out of their home towns and cities.

“Once stock levels do start to significantly replenish over the next few months, the froth will most likely come off the top of asking prices, albeit that it may take at least until the end of this year to see the market rebalancing with potentially a very busy summer period in between, as families seek to relocate in time for the start of the new school term in September.

“Buyers who are able to sit it out and wait until early 2022 may then find they have more choice and therefore more negotiating room than they do at the moment, something to bear in mind for those whose move is discretionary rather than absolutely necessary.”

Director of Benham and Reeves, Marc von Grundherr, said there is still “colossal growth” in the market.

He explained: “A 0.8 percent rise in monthly price rises, whilst slower in pace than in recent months, is still almost 10 percent annually if such a trend were to continue.

“That’s colossal growth and even more so at the top end of the market where homes are seeing over 12 percent rises in value despite the fact they may soon miss out on the maximum stamp duty holiday saving of £15,000.

“This bodes well and may confound the doomsayers that have been forecasting a cliff edge come the end of June.”

Managing Director of Ascend Properties, Ged McPartlin, said northern regions are continuing to “lead the market”.

He said: “Despite some southern regions finally starting to stir, the North continues to lead much of the market where annual house price growth is concerned.

“It’s probably not accurate to say that cash-rich re-locators from southern cities are driving this northern resurgence and this strong performance has been very much built on a foundation of localised demand, from buyers keen to take advantage of record-low interest rates while they can.”

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