The price of property coming to market has increased by £55,000 in the past two years to reach a staggering £367,501, Rightmove’s House Price Index shows.
The number of buyers contacting estate agents in the month is 31% higher than the more normal 2019 market, but down 14% year-on-year. From that data Rightmove concluded that the market was competitive, but is showing signs of slowing down.
Guy Gittins, chief executive of Chestertons, says: “Before the pandemic, the market had three years of people being concerned about the impact that Brexit would have on the economy in addition to the potential change of government on the cards.
“This led to many house hunters putting their property search on hold. Since the pandemic, however, market activity has completely shifted the opposite direction as buyers have become far more concerned about living in the right property.
“Despite living costs and interest rates going up, the market is showing no signs of slowing down and the strong buyer demand we have seen since the beginning of the year has continued into the month of May.”
Speed of market means available properties are down 16% compared to last year and down 55% compared to 2019.
In particular there’s a huge lack of stock when it comes to two- and three-bedroom semi-detached homes.
Tim Bannister, Rightmove’s director of property science, said: “People may be wondering why the housing market is seemingly running in the opposite direction to the wider economy at the moment.
“What the data is showing us right now is that those who have the ability to do so are prioritising their home and moving, and the imbalance between supply and demand is supporting rising prices.
“Though demand is softening from the heady levels we saw this time last year, the number of buyers enquiring is still significantly higher than during the last ‘normal’ market of 2019, while the number of homes for them to choose from remains more constrained.
“We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year, and a combination of more supply of homes and people weighing up what they can afford will help to moderate the market.”
Mortgages still appear to be on the cheap side, despite recent hikes in the Bank base rate.
The average monthly mortgage payment for a typical first-time-buyer home has increased by 13% (+£100) since December last year, although this is only 11% (+£87) higher than 10 years ago.
This illustrates that a decade of historically low interest rates have effectively compensated for rising house prices in terms of monthly outgoings on a mortgage.
By contrast, equivalent monthly rental payments are 40% higher than ten years ago, as tenants feel the full effect of rising costs. Rents are currently rising at the fastest pace that Rightmove has ever recorded.