Asking prices in England and Wales have increased for a fifth month in a row, up 1.2% to a new record average high of £317,281 in May, the latest index shows.
Despite other indications that the property market in London has been slowing, the data from real estate portal Rightmove also shows that asking prices reached a record in the city too, up 2.1% month on month to £649,864.
The price of a property coming onto the market is now 3% higher than a year ago and it is typical family homes that are seeing the biggest asking price rise, up 5.4% year on year.
The Rightmove report suggests that it is home owners with younger children who are keeping the market moving as they are twice as likely as the average person to be moving home at present.
It also suggests that despite a snap general elections being called and continued Brexit uncertainty, these factors are failing to knock market momentum with year to date sales agreed some 2% higher than the previous election year of 2015.
The data shows that in the run up to the vote London’s new seller numbers are up by 4% month on month in contrast to the national picture where they are at an overall standstill.
But not everywhere is seeing asking prices rise. In Wales asking prices were down 1.8% month on month to an average of £182,769 and are just 0.7% higher than a year ago. They fell by 0.1% in the North West month on month to £185,911 but are up 3.6% year on year.
Asking prices did not change in the East of England which had been leading the price growth nationwide. In this region asking prices were flat in May but at £349,251 are 4.4% higher than the same month in 2016.
Apart from London the only other region to see substantial price growth month on month was the South East with a rise of 2% to £426,767 and year on year up 3.4%. This was followed by the South West with a monthly rise of 1.5% to £309,033 and prices are 3.7% higher than a year ago.
Elsewhere the month on month rises were more modest. The West Midland recorded a month on month rise of 1.3% to £218,620 and asking prices are 5.9% higher year on year. While in the North East they crept up 0.4% to £150,935 and up 1.6% year on year.
In the East Midlands asking prices were up 0.2% to an average of £205,453 and up 4.4% year on year and in Yorkshire and Humber they were up just 0.1% month on month to £180,672 and saw an annual rise of 1.9%.
Overall asking prices are showing strong growth, according to Miles Shipside, Rightmove director and housing market analyst. ‘Demand is exceeding supply in many parts of the country and continues to push up the prices of newly marketed homes. The number of sales agreed by estate agents remains robust, being 2% higher in the year to date than the same period in the previous election year of 2015,’ he said.
‘We normally see a high proportion of market activity in the first half of the year, and in spite of potentially disruptive events the established pattern is continuing. It remains to be seen how much momentum may drop away in the second half of the year with stretched affordability a problem for potential buyers, though competition among lenders who are keen to lend will help some to push their budgets higher. Those with the greatest motivation to move are often those with growing families, with their need for space or access to schools outweighing uncertainties that might cause others to delay their future housing plans,’ he explained.
Indeed, Rightmove research shows that home owners with children under eleven years old are twice as likely as the average person to be moving home. Their typical target property types are three bedroom homes and four bedrooms excluding detached property. The price of property coming to market in this sector has seen the biggest increase over the last year, up by an average of 5.4% or £13,960 to £270,953.
‘What seems to be happening is that moving pressures are understandably taking priority over electioneering and Brexit worries. For many in this group, it seems that moving is definitely on their manifesto,’ Shipside added.
In London, while parts of the market continue to re-adjust to stretched affordability, increased stamp duty and slower rates of price growth, the Rightmove report suggests that new sellers in the capital seem to be showing less hesitancy to come to market than many other home owners elsewhere in the country.
‘More properties have come to market than in the previous month, despite the approach of polling day often causing potential sellers to delay. In addition, the average asking price of newly marketed property has hit an all-time high, just under £650,000. Time will tell how close these sellers get to their asking prices, but the uncertainty associated with an election has not deterred them from trying in increasing numbers and at an increased average price,’ Shipside pointed out.
‘While some sectors and areas of the London market are finding it harder to sell, this election, unlike the one in 2015, does not introduce uncertainty over the unknown factor of a mansion tax. The market knows what taxes are due, and while they are very substantial in the upper sectors, we are well over two years through the process of readjusting to their effect,’ he added.
Price growth is likely to stabilise as there is an overall predominate air of confidence in the housing market, according to Russell Quirk, chief executive of online estate agents eMoov.
‘It is interesting that Rightmove should have observed no wobble in the market where asking prices are concerned, despite the industry indices based on sale completions stating otherwise,’ he pointed out.
But there are concerns being voiced that the continued growth in the market is not sustainable. ‘The current imbalance between supply and demand is creating an exclusive home ownership club for those who are financially secure, whether it be via the Bank of Mum and Dad or through individual savings,’ said Jeremy Duncombe, director of Legal & General Mortgage Club.
‘Our housing market needs to be able to accommodate everyone and this will only be achievable if we tackle the root of the problem. Supply. Unsustainable house price rises will only be tempered by building more homes across a variety of tenures, over the whole of the UK,’ he added.