The number of homes listed by estate agents is higher than any time in the last decade. This keeps house prices down.
Rightmove’s property search site shows that estate agents in Britain are on average marketing 63 homes. This is a 13% increase from the same time last year, and the highest since 2014.
At the height, branches were lucky to have 40 homes available at a time. The shortage of homes, combined with the booming demand fueled by the stamp duty holidays, drove house prices to record levels.
Rightmove stated that increased choice helped increase the negotiating power of would-be purchasers and prevented house prices from increasing as quickly as expected.
Rightmove’s average price for a new listing has increased by 0.3 percent over the last month, to £371,958. This is significantly lower than the typical 1.3 percent increase month-on-month seen in October.
Tim Bannister is the head of Property Data at Rightmove. He said that this month’s modest price growth was due to the fact that buyer choice has soared to a level last seen in 2014. “With a large number of properties to choose from and the ball in the buyers’ court, sellers must price their homes competitively to attract a buyer. This is especially true with affordability still stretched.”
The fact that more homes are on the market is due to buyers who, in most cases, also need to sell their existing homes, being attracted back to the marketplace by lower mortgage rates. The average fixed five-year mortgage rate is now 4.6 percent, down from the peak of 6.1% in July 2023.
Rightmove data shows a 29 per cent increase in sales compared to the same time last year. Estate agents also receive 17 per cent more inquiries.
The latest statistics show that the housing market is improving after a two year downturn. During this time, a rapid increase in mortgage rates caused people to postpone their plans to move. Recently, housebuilders reported that they were selling more homes. Estate agents are also becoming increasingly optimistic about their business outlook. House prices are close to the peak they reached during the summer of 2012.
Rightmove estimates asking prices have increased by 1 percent over the last year. “Second-stepper” houses — such as three-bedroom homes — gained the most, increasing by 1.7% year-on year.
Rightmove has reported that the value of “top-ofthe-ladder homes”, which are defined as detached four-bed and five-bed houses, has decreased by 0.2%. Bannister stated that some potential buyers were “waiting until budget clarity” to commit to moving.
He still predicts “an active 2025”. Interest rates will continue to fall, and wage growth outpaces house price inflation. This improves affordability.
Bannister stated that “once we have more clarity about the content of the budget [on 30 October], hopefully followed by rapid second and third rate cuts, we can see another surge in optimism in the market like we did in the summer.”
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