Despite the wider economic challenges impacting the UK property market, a continuous disparity between supply and demand has pushed house prices up to a record high after a 0.9% rise in October.*
According to Rightmove’s House Price Index, the rise represents and increase in value upwards of £3,398, with the price of an average home now standing at £371,158.*
This new asking price record is somewhat of a surprise given the market uncertainty that followed former Chancellor Kwasi Kwarteng’s mini budget in late September. There was also little sign of downwards price pressure towards houses already on the market, with the number of reductions up by 2% following the announcement to 23% of all properties reduced, which is still a far cry from the pre-pandemic five-year average of 32%. *
Tim Bannister Rightmove’s Director of Property Science, comments:
“What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues."
"New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average. It will take a bit of time for the market to settle into a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”
It's understandable that some prospective buyers will be pausing their plans momentarily in an effort to ‘wait-out’ the next few weeks and months until market uncertainty wears off and the full picture becomes clear. Despite this, demand still holds steady at 20%* higher compared to a more normal market of 2019. This trend also follows through to the first-time-buyer sector, with demand still high at 24%* compared to 2019, further demonstrating that buyer confidence has continuously improved since the pandemic.
Although some buyers are awaiting a clearer outlook for the time being, those who have already agreed to their purchase appear to be proceeding with confidence. Only 3.1% of sales agreed fell through in the two weeks following the mini-budget announcement, which parallels the 3.0%* reported over the same two weeks in 2019. UK agents are recording that those who have managed to secure a low-rate mortgage offer are eager to complete their purchase as fast as possible, before the offer closes.
Tim concludes: “The vast majority of buyers who had already agreed to their purchase are still going ahead. Agents report that many of those who managed to secure a mortgage offer at a lower rate before lenders quickly increased them are now rushing through their agreed deal to avoid their offer expiring and facing a higher rate when they come to reapply. It’s understandable that some new movers who have the option to wait may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home.”
"With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip supply and supports prices.”
Considering the increase in average home values, do you know the value of yours? Book a valuation with us today to find out.
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