Rightmove has upped its house price forecasts for this year as new stock supply fails to keep up with demand.
The portal had previously predicted annual house price growth of 5% but now, due to volumes struggling to recover fast enough, it expects rises of 7%.
Its latest asking price data for June showed the number of new sellers coming to market is up by 13% compared with this time last year, although available stock is still 40% down on June 2019’s levels.
Buyer demand is up 26% on June 2019’s levels, though down 7% on last year’s frenzied market, Rightmove said.
Sellers, and agents, remain bullish with their pricing.
The average price of property coming to market hit a sixth consecutive record of £369,968 this month, according to Rightmove.
That is up 9.3% annually and 0.4% on a monthly basis.
The report also showed that average stock per agent was 47 properties in June, down from 55 in the same month last year but up from 46 in May and 40 at the start of this year.
Time on the market remained flat at 32 days.
Tim Bannister, director of property science for Rightmove, said: “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.
“While more choice is welcome news, the number of homes available remains well below the more normal levels of 2019 and is unable to satisfy the continued high demand that we’re seeing.
“Though a softening in demand is moving the market from a boil to a simmer, it remains 26% up on 2019. With such an imbalance remaining between supply and demand, prices look underpinned, and we would therefore only expect typical smaller seasonal month-on-month falls, rather than more significant price falls in the second half of the year.
“This has led to us revising our annual price growth prediction for the end of the year from 5% growth to 7%, although this would still mark a slowing from the 9.3% seen this month.”
Uk House Prices – Rightmove Reveals The Latest
Average price continues to rise.
The average price of property coming to market rose for the sixth consecutive record this month, up by 0.4%, or an equivalent of £1,354, to £369,968, the latest Rightmove House Price Index has shown.
Rightmove said a continuing desire to move, and low numbers of homes for sale, has been driving further price growth even at a time when personal finances are becoming increasingly stretched.
Its report revealed that buyer demand continues to exceed historically normal levels and is now 26% higher than at the same time in 2019, although down 7% on June 2021. The number of sellers was 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 pre-pandemic 2019.
The slow rate of stock recovery has led to Rightmove revising its 2022 price forecast, with 7% annual growth now expected by the end of the year across Great Britain, up from its 5% forecast at the start of the year.
Tim Bannister, director of property science at Rightmove, said that having more new sellers this month is a win-win for the market.
“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,” he said. “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.”
Bannister added that in the current fast-changing economic climate, those who are looking to find a suitable home they can afford, may choose to act now rather than wait.
With a wide imbalance remaining between supply and demand, he said prices look underpinned, and only typical smaller, seasonal month-on-month falls can be expected in the second half of the year.
The average first-time buyer monthly mortgage payment for someone taking out a two-year fix is now 20%, or £163, higher than at the start of the year, now at £976 per month.
Rightmove said demand is likely to return to more normal levels in the second half of the year due to the rising cost-of-living and affordability concerns – however, the prospect of further interest rate rises may drive some to act now to lock in a longer fixed-term mortgage rate.
“The challenges presented by rising interest rates and the cost-of-living will no doubt have an effect throughout the second half of the year, as some people reconsider what they can afford,” Bannister stated. “However, there is also anticipation among would-be home-movers that personal finances may become even more stretched in the coming months, with further interest rate rises expected and the energy price cap jumping again in October.
“Given the political and economic uncertainty at the moment, those who want to move this year, particularly first-time buyers, may seek some financial certainty by locking in longer fixed-rate mortgage terms now before their monthly outgoings increase again.”
The Rightmove House Price Index is compiled from the asking prices of properties coming on to the market via over 13,000 estate agency branches listing on the Rightmove website.