House prices hit sixth consecutive record as housing crisis bites
The housing crisis shows no sign of abating with the average price of property coming to market has hit a sixth consecutive record, rising by 0.4% to £369,968 adding another £1,354 to the price of a home, according to data from Rightmove.
A continuing desire to move and low numbers of supply of homes for sale have driven further price growth even at a time when personal finances are becoming increasingly stretched due to ongoing cost of living challenges for the British public.
However, there is some light at the end of the tunnel emerging, and the figures collected between June 12 and July 9 have unveiled that although demand continues to exceed historically normal levels and is now 26% higher than at the same time pre-pandemic in 2019 it is down 7% on June last year.
There are also signs of the seriously depleted stock situation improving, with the number of sellers up by 13% compared with this time last year, but the number of available homes for sale is still 40% down on where it was in 2019.
“While buyer demand may be cooling compared to the dizzying heights of the peak pandemic market, there remains a huge imbalance between buyer appetites and available stock levels.
“The increasing cost of borrowing and the wider economic backdrop may cause buyer demand to continue to cool further this year, albeit gradually. However, even though a fresh wave of homes are coming to market, this boost to stock levels is unlikely to rebalance the scales. Therefore, we can expect property values to remain buoyant for the remainder of 2022,” said Marc von Grundherr, director of London estate agent Benham and Reeves.
Interest rate rises and record prices mean that the average first-time buyer monthly mortgage payment for someone taking out a two-year fix is now 20% (+£163) higher than at the start of the year, now standing at £976 per month.
Tim Bannister Rightmove’s director of property science said there are chinks of light in the market, but it’s not quite time for house hunters to expect a levelling of the market, despite economic headwind, due to the stock supply problem.
“Having more new sellers this month is a win-win for the market, as these sellers will likely achieve good prices for their homes given the sixth asking price record in a row that we’ve now seen, which may help to explain the increase in new stock coming to market over the last year.
“ For those looking to buy, it means more choice, and a slight easing in competition against other buyers while the market is still moving very quickly. In the current fast-changing economic climate, those looking to buy who find a suitable home they can afford, may choose to act now rather than wait.”
In news that will not calm the ire of potential house buyers, this slow rate of stock recovery has still led Rightmove to revise its 2022 price forecast, with 7% annual growth now expected by the end of the year across Britain, up from its 5% forecast at the start of the year.