The average price of property coming to market has risen once again, with the 0.3% increase adding a further £852 to the value of a home - 7.6% higher than in January 2021, the highest annual rate of price growth recorded since May 2016, according to Rightmove.
2021’s housing market was defined by people’s sustained desire to move coupled with decreasing numbers of homes for sale, and this continues into the New Year.
Asking prices traditionally see a rise in January, though, according to this morning's data from Rightmove, this figure is compared with an unusual drop in January last year as the rush to beat the March stamp duty deadline started to abate. The jump in average asking prices this month is driven by homes in the ”top of the ladder” and “first-time buyer” sectors, with first-time-buyer type homes hitting a new record average asking price of £214,176.
Tim Bannister, Rightmove’s Director of Property Data, comments: “New Year sellers and buyers have been quick off the mark this year, with Rightmove recording the highest ever number of Boxing Day sellers coming to market. These early-bird sellers who got themselves ready to come to market are now benefitting from the busiest start to the year that we’ve ever recorded, with the number of prospective buyers enquiring about homes up 15% on this time last year.
"People who have made it their New Year’s resolution to move are finding asking prices are within just one per cent of the record from October last year, and are at the highest level ever recorded for first-time-buyer type homes. All of the signs suggest that prices are likely to continue to rise until more choice is available. Three regions are in most urgent need of new supply, the East Midlands, South West and South East of England, as they are now at unsustainable rates of annual price growth above 10%.”
The number of homes available for sale per estate agency branch has hit another record low of 12 properties, down by two from last month. The few homes that are on the market continue to be snapped up at speed by determined buyers, with the average time to find a buyer in December 2021 being more than two weeks quicker than in the same period the previous year.
While the low number of available homes may appear daunting for buyers still looking to make 2022 their year to move, there are early signs of more property choice coming to market soon. Encouragingly, the number of requests to an estate agent to value a property, traditionally the first part of a seller’s journey in coming to market, was up by 44% in the first working week of 2022 compared to the same period in 2021, and up by 48% when compared to 2020.
This first working week was the busiest ever opening to a year for home valuation requests, and the first working day, 4th January, saw the fifth-highest number of valuation requests in a single day that Rightmove has ever recorded.
Competition among buyers for available homes also remains strong as we move into 2022, with 15% more enquiries from would-be buyers to estate agents than at the same time last year. With both more enquiries from buyers and fewer properties available, the overall level of buyer interest per available property is almost double what it was at the start of 2021, which was itself a very active market. As a result, more than 70% of the properties currently on estate agents’ books have already been sold, leaving less than 30% still available to buy.
Bannister adds: “It’s clear that the trends which defined the market in 2021 have carried over into this year. That being said, we are seeing early signs of a better-balanced market in 2022. The number of requests from would-be sellers to agents to value their home has continued to increase from the end of last year and was at one of its highest points ever on the first working day of this year.
"While this potential new supply will take a little while to appear on the market, it’s an encouraging sign of more choice for buyers in the coming months. The speed at which we’ve seen the fresh choice that has come to market being snapped up by eager buyers over the past 18 months is a reminder to buyers to move fast and book a viewing with the estate agent as soon as a property that could be the one for you comes to market. Almost 40% of people enquiring about a home who have a property to sell say that they are yet to put it on the market.
"In the current market, where they are competing against other buyers who are able to move more quickly, this is likely to mean they’ll miss out on the home they want. To put yourself in the best possible position to proceed, you should become a ‘power buyer’, by making sure your current home is on the market or preferably sold subject to contract first, before starting the search for your new home.”
Guy Gittins, CEO of Chestertons, comments: “We expect the market to remain buoyant for at least the first quarter of 2022 as London is seeing the return of office workers, international students as well as Londoners who left the capital during the peak of the pandemic but are now seeking a return to the hustle and bustle of the city.”
“London’s property market cannot currently meet the demand from house hunters which, inevitably, has led to a very competitive market for buyers and rising prices. To secure their ideal property, buyers are advised to put themselves in the best possible position by having their finances and paperwork in place prior to starting their search as it will enable them to act fast.