The latest Rightmove data revealing that average new seller asking prices increased by 0.8%, or £2,974, this month to £370,759 is double the long-term average for this time of year, reflecting the fact that there has been a significant rise in activity levels, supported by mortgage rates trending downwards and property choice increasing.
However, the market remains cautious, and there are still uncertainties ahead with ‘value-conscious’ purchasers taking longer to find the right property at the right price.
Looking ahead, all eyes are now on the Autumn Statement, with Rightmove’s real-time data suggesting that some sectors are already reacting to the widely mooted increase in capital gains tax, with a record proportion of former rental homes currently on the market for sale, suggesting more landlords are selling up.
Industry reactions:
Nathan Emerson, CEO of Propertymark comments on Rightmove, said: “It is positive news to see further uplift across the housing market now affordability has more confidently swung in the direction of consumers. Inflation figures due out on Wednesday will prove to be a key influence on the next interest rate decision which will happen on the following day.
“Propertymark remains keen to see further dips in base rate as conditions permit, but at this point it is important to consider what effect the budget at the end of next month may have on the housing market and if today’s figures reflect a keenness by consumers to complete on a property before any potential changes to the current tax structure might be announced.”
Tom Bill, head of UK residential research at Knight Frank, commented: “Falling mortgage rates have prompted buyers and sellers into action this autumn, which means it should be the strongest final quarter in three years. The biggest remaining uncertainty is the Budget, which is likely to mean that taxes rise. People will also continue to roll off favourable mortgage rates agreed in recent years. Transaction numbers and demand will rise but sellers should also be aware that there won’t be an awful lot of buyer exuberance out there.”
Jason Dainty, co-founder of Hopkins & Dainty in Derbyshire, remarked: “There is a good level of activity at the moment leading into the Autumn, even though summer is typically a quieter period for the market as people head off and come back from holiday. We’re seeing more sellers coming to market, and overall we’re seeing some positive sentiment amongst both sellers and buyers.
“Well-priced and attractive properties are still selling quickly, even getting interest on the first day of marketing. However, the price has to be right – otherwise, they risk being ignored by prospective buyers. I’m hopeful for a positive run up to Christmas now as Autumn gets underway.”
Tony Gambrill, regional sales director at Chestertons, said: “Due to pent-up demand from buyers, London’s property market was experiencing an unusually busy summer whereby sellers still had the upper hand during price negotiations. House hunters felt that market conditions had improved amid lower interest and mortgage rates and were keen to finalise their search. This additional buyer confidence will result in demand remaining high well into the autumn.”
Sam Mitchell, CEO of Purplebricks, noted: “The recent strong momentum in the housing market is at risk if plans to increase capital gains tax are confirmed in the October Budget. Mortgage rates are at 18-month lows, listings are at multi-year highs and relative political stability has encouraged buyers to forge ahead with their purchasing decisions, yet a CGT rise could erase these hard-won gains.
Hiking CGT is an anti-landlord tax and we have already seen a sell off in anticipation of the increase. This further hit to an already low housing supply will drive skyrocketing rents even higher and make it even harder for first time buyers to get on to the housing ladder. We would urge the Government to instead focus its efforts on more progressive incentives such as CGT breaks for landlords if they sell their properties to tenants or first-time buyers.”
Adam Feather, managing director at Robert Anthony Estate Agents, added: “Prospective homebuyers are feeling more confident thanks to easing interest rates. There are signs that activity levels are improving across all price ranges, and we expect this positive trend of growth to continue in the near-term as affordability levels improve.”
Traditionally busier Autumn market starts ‘early’ pushing up house prices