Just as we thought UK house prices had no records left to beat, it's happened again. The latest Rightmove house price index is showing an average £3,534 monthly rise – that's yet another 1.1 monthly increase on August, bringing the annual price increase to 5.5 per cent higher in September 2020 than a year ago.
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And that's not all. Rightmove are now predicting that the annual house price increase will hit seven per cent in December, and no wonder: the number of sales agreed in September was up 70 per cent from same time last year, with many estate agents reporting having more sold properties than those available for sale.
This is good news in the sense that the property market has proved extraordinarily resilient despite Covid, but there are signs that this situation is both making things difficult for buyers and giving false expectations to sellers. Director of Benham and Reeves (opens in new tab), Marc von Grundherr, commented:
'There’s no doubt that this extraordinary market revival has put UK homesellers back in the driving seat, with huge levels of buyer demand boosting asking prices considerably.
'This demand has is being driven by the desire for more space and larger homes. However, it seems as though some sellers are starting to push their luck in this respect, with anyone and everyone increasing their asking price expectations whether or not it can be justified.'
In other words, sellers still need to consider raising their asking price carefully. Doing so without a good reason could result in the home taking longer to sell.
Buyers, on the other hand, are really beginning to suffer the consequences of the exceptional demand resulting in a backlog where it comes to getting mortgages and completing. Managing Director of Enness Global Mortgages (opens in new tab), Hugh Wade-Jones commented:
“The one downside to such monumental market activity is the frustrating situation many buyers are finding themselves in at the back end of the transaction process. Having had an offer accepted in extremely hot market conditions, it’s now taking months on end to see that offer move through the legal process to completion.
'So while many agents may find themselves in the extraordinary position of having more stock sold subject to contract than they have for sale, the ratio of actual homes sold is probably telling a slightly different story.
'As a result, the reality of market conditions is probably a tad more muted than we are being led to believe and so while the time it’s taking to list a property as sold may have accelerated actual sale times aren’t particularly quick.'
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