The first half of 2021 was the busiest year ever for the housing market, it turns out.
According to Rightmove, the frenzied market activity has helped the average asking price of a new property for sale soar to a new all-time high for the fourth straight month.
The average asking price has risen by £21,389 to £338,447 in just six months, according to the property website’s index.
Tim Bannister of Rightmove said: “We predict sales completed will be the highest ever in a single month when the June data is released by HMRC.
“This means that the first half of 2021 is likely to have seen a record number of moves compared to the first six months of any other year, caused by the side effect of the pandemic, which is a new focus on what a home should offer.”
Mad activity has helped average real estate asking prices rise, says Rightmove
He added: ‘That is one of the driving forces behind four consecutive months of new record average real estate prices.
Rightmove said that in the month to mid-July, asking prices rose 0.7 percent – the equivalent of £2,374 and the biggest monthly increase at this time of year since July 2007, at the height of the boom just before the financial crisis.
The pricing data is based on Rightmove’s asking prices, while the sales volume data is a prediction of what the next HMRC transactions will show, based on Rightmove data looking at properties marked ‘under offer’ or ‘ sold under contract’.
Rightmove attributed the increase to a lack of supply of homes for sale and identified a shortage of 225,000 homes for sale which, if available, would have helped to maintain a more normal level of the housing stock for sale and stabilize housing stocks. the prices.
This massive shortage, along with frenzied buyer activity, is fueling record high prices and leading to record lows in available inventory for sale.
The high activity has continued, according to Rightmove, despite the end of the stamp holiday.
The Stamp Duty Holiday, which ended on June 30, saw no tax on the first £500,000 of a property purchase price replaced by no tax on the first £250,000 until the end of September. After that, the stamp duty must be returned in full.
Rightmove said the average value of a home in Britain is currently £338,447
Rightmove said there is an “urgent need” to rebuild low real estate inventories so that price stability can return.
It anticipates the latest transaction data from HMRC, which will be published in a few days.
Demand has also been spurred by the continued creation of new households and the fact that real estate is seen as an asset to hold, with historically low returns from many other forms of investment.
New stamp duty deadlines in England and Wales for sales completed at the end of June have also contributed to the depletion of property for sale and concentration of activity.
“As a result, potential buyers have the lowest choice of owner-occupied homes we’ve ever registered, continued price increases and increasing affordability.”
Rightmove predicts sales completed will be all-time high in one month
The average house price is up 0.7 percent from a month earlier, the equivalent of £2,374
Rightmove expects the number of sales completed in the first six months of the year to be reported by HMRC later this week to be around 800,000, which could just improve on the previous record of 795,000 set in 2007.
The 2007 record was set in very different circumstances, at a time when mortgage lending criteria were much less stringent than in today’s more controlled market.
Analysis shows that the shortage of 225,000 owner-occupied homes is because 140,000 more sales have been agreed and 85,000 new homes less than the long-term – between 2014 and 2019 – average over the first half of the year.
The net result of this major imbalance between supply and demand is that the average number of homes for sale per real estate agency is at a new record low of 16 homes. It compares to the previous pre-2021 low of 25 homes and a long-term average for this time of year of 31.
This is based on Rightmove data for the average number of homes available per broker on the site.
Still in positive territory: Rightmove revealed the monthly change in average asking prices revealed
The boom in sales demand and the ensuing biggest-ever supply imbalance was most noticeable in the higher end market segments.
Rightmove said detached homes with at least four bedrooms have seen a 39 percent increase in the number of sales being agreed, and a 15 percent decrease in the number coming to market compared to the first six months of 2019.
As a result of this massive turnaround, average prices for this sector have risen by 6.7 percent in the past six months.
Rightmove’s “second movers” category — mostly made up of three-bedroom homes — has also seen a marked turnaround, with sales up 29 percent and new listings down 10 percent. The result was tumultuous price increases of an average of 6.9 percent in the first half of the year.
Meanwhile, the heavily pressured new buyers will find that their typical sector of two bedrooms and less has much the same offerings as in 2019, with a decline of just 1 percent. Their agreed sales figures are also less strong, although still 26 percent higher than the same period in 2019.
The inventory shortage is therefore less acute, and with prices rising a more modest 3.4 percent, it could be a relative buying opportunity for those looking to climb the real estate ladder, Rightmove suggested.
The average time it takes to land a buyer has fallen since the beginning of the year
Mr Bannister said: ‘New buyers are currently benefiting from the fact that their sector has the most buyer-friendly conditions. The choice is still more limited compared to the same period in 2019, but price increases are the most moderate of all sectors.
‘Saving an advance is still very difficult, but 5 percent is now an option, and with many paying rising rents, buying a home for a lower deposit is once again an opportunity. The opportunity is also there for property owners to come to the market as it is still a great seller’s market despite the recent end of the tax break in Wales and the scaling back in England.
“We’ve also seen a much more efficient housing market over the past year, with strong buyer demand and a faster home churn, resulting in a much higher percentage of sellers finding a buyer for their home and fewer unsold homes being pulled from the market. market.
‘Buyer confidence remains strong, and the growth of new households combined with people living longer and changing housing needs exacerbate long-term housing shortages.’
Brokers confirmed the high activity levels in the market and the lack of properties for sale.
Rob Sabin, of brokers Miles & Barr, said: ‘The property market in East Kent remains very active during the first six months of 2021, with buyers continuing to buy the limited available housing stock.
“The number of sellers entering the market has decreased over the course of the year, meaning we have seen the level of new offerings entering the market drop significantly year over year, while the total available inventory levels in the market have decreased significantly. their turn to the lowest we’ve seen in a number of years.
“While the number of new listings has declined, our results remained strong with 945 homes for sale accepting an offer. East Kent has also seen an increase in the number of buyers looking to move to rural or coastal areas, with a fifth of registered applicants coming from Greater London.”
Marc von Grundherr, of estate agents Benham and Reeves, said: ‘The UK property market continues to defy expectations, with house prices once again hitting record highs, despite rumors of a fall in value due to the expiring stamp duty deadline.
“There is no doubt that the stamp duty holiday has been the catalyst for this impressive market performance. However, it is not the driving factor behind the intent to buy for UK home buyers and so a robust level of activity will remain long after it expires.
“If you couple increased demand with a severe shortage of inventory, it is very likely that real estate values will remain high for the rest of 2021. The buyer frenzy reveals a 225,000 shortage of homes for sale.