UK House Prices August 2021
Summer holidays normally lead to an August slowdown in activity and lessening of price pressure, and although this month sees the first overall monthly fall in the average price of property coming to market so far in 2021, this is predominantly due to a cooling at the higher end of the market.
Rightmove reported a fall of 0.3% (-£1,076) this month with the national asking price now stood at £337,371. This is said to be driven by a 0.8% drop in the upper-end, typically four-bedroom-plus sector with buyers no longer able to make large stamp duty savings, it said the typical asking price was down by £4,699.
In contrast, there are new record price highs in the two-bedroom sector, up by £1,328 (+0.6%), and three to four-bedroom second-stepper-type properties, up by £975 (+0.3%), where activity remains very strong.
These lower-priced sectors are much less affected by the withdrawal of most stamp duty incentives and may have housing higher up their summer agenda than usual as more are holidaying closer to home.
Tim Bannister, Rightmove’s Director of Property Data says:
“Average prices have only fallen in the upper-end sector, which is usually more affected by seasonal factors such as the summer holidays and has also seen the greatest withdrawal of stamp duty incentives. The mass market of properties that cater for first-time buyers and second steppers is still seeing high demand and upwards price pressure, leading to a new record high average prices in those sectors.”
“Buyer demand remains strong, especially in the more affordable areas outside of London where space is generous for incoming buyers who are partly working from home and have the flexibility of travelling,” added Tomer Aboody, director of property lender MT Finance.
He said the new trend in work-life balance looks set to continue and is opening up a better spread and choice of housing across different areas, rather than restricting buyers to city centres.
“This, in turn, is driving up prices in these areas,” he said.
Rightmove predicts that more properties will come on the market when owners have more clarity over their employers’ long-term balance of home and office working.
“Their future housing needs are hard to scope out if it’s still uncertain whether the daily commute is soon going to return,” said Mr Bannister.
“If it’s going to be less restrictive in the long term, then that means less need to live close to transport networks and a greater need for home working space.”
Buyer demand remains strong despite the relative summer pause, and Rightmove predicts that there will be an autumn bounce in both seller activity and prices. In the first week of August, individual buyer enquiries to agents are up by 56% on the same period in the pre-Covid year of 2019, and down by just 17% on the frenzied post-lockdown 2020 numbers. This snapshot also shows that the number of sales agreed is up by 9% on the same period in 2019. Available stocks for sale still at record lows, with buyer demand hoovering up new supply leading to more properties selling and selling more quickly.
These market conditions mean that homeowners who have yet to come to market and address their new housing needs should act soon to get a better chance of a quick sale at a good price and be in their new home before Christmas. Rightmove’s analysis shows that the likelihood of sellers finding a buyer remains at, or close to, an all-time high. The average time for a newly listed property to be marked sold subject to contract is the quickest ever at 36 days, which is a whole month faster than in February 2020, which was the last month before the first lockdown. However, given the fierce competition to buy property even these impressive statistics leave a high risk of losing out to another buyer who is in a better position to proceed. As a result, many sellers are choosing to have a buyer lined up subject to contract before entering the race to secure their own purchase. “Selling before you buy” puts them in the best position to be at the front of the queue to buy suitable properties as soon as they come to market.
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Source: Rightmove, BBC, The Guardian