The average price of property coming to market has hit another new record for a fifth consecutive month, according to the latest Rightmove data.
However, house prices nationally rose by a modest 0.3% this month, the smallest increase since January signalling that the pace of price rises has started to slow.
In the South-East, this monthly increase is slightly higher at 0.8%, bringing the average house price in the region to £493,362, almost 11% higher than this time last year.
Despite five consecutive interest rate rises and the increasing cost of living, buyer demand for each available property remains very strong, being more than double (+113%) the pre-pandemic five-year May average. However, Rightmove reports that it is seeing signs that this is continuing to ease, with this measure down by 8% in May compared to April.
After a very strong first half of the year, it is likely that affordability constraints will have a greater influence on market behaviour in the months ahead, with further interest rate rises anticipated.
This, alongside more choices coming onto the market for buyers and the usual seasonal variations, means that there are likely to be some month-on-month price falls during the second half of the year. Rightmove expects this to bring house price growth by the end of the year to around the 5% it originally predicted in December.
Buyers are currently being welcomed with more fresh choices, with the number of properties coming onto the market up by 7% compared to this time last year. However, this measure remains down by 11% when compared to the same time in 2019.
Tim Bannister, Rightmove’s Director of Property, comments: “The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years.
When we look at the number of buyers contacting estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.
We’re hearing from agents that though they might have had slightly fewer enquirers for each property in recent months, they’re still seeing significant interest from multiple buyers and are achieving successful sales. Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing. We expect this to bring the annual rate of price growth down from the current 9.7% towards the 5% increase that Rightmove predicted at the beginning of the year.”
A conveyancing logjam means that those who are looking to move this year and have yet to act will need to do so in the coming weeks.
It is currently taking 150 days to complete a purchase on average after agreeing on a sale, 50 days longer than at this time in 2019.
This means that those who are hoping to complete a deal in time to enjoy Christmas in a new home, need to come to market in the next few weeks to give themselves the best chance of finding a buyer and completing the transaction by the end of the year.
Rightmove has stated that there are more than 500,000 homes that are currently sold subject to contract, which is 44% higher than it was at this time in 2019, and 39% higher than the pre-pandemic five-year average.
If you are considering a move this year, or have any queries regarding the current housing market, please contact one of our property experts today.
