Rightmove: Asking prices hit new high but legal delay...

Asking prices have hit a record high as agents and sellers become more bullish about the market’s prospects.

The latest Rightmove house price index shows the average price of property coming to the market for sale reached a new record of £375,131, rising by 0.8% at the start of May.

Asking prices are just 0.6% higher than this time last year and there is of course no guarantee that homes will sell at these valuations.

Rightmove added that May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years.

It said price growth is still led by the largest-homes, top-of-the-ladder sector, with prices in this sector up by an average of 1.3% compared with last year.

The portal suggested that the market is being driven by pent-up demand.

It said the number of sales being agreed during the first four months of the year is 17% higher than last year, outstripping the 12% increase in the number of new sellers coming to market

However, under offer homes are taking a “painful” 154 days to complete on average, Rightmove warns.

Tim Bannister, Rightmove’s director of property science, said: “Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the Base Rate up to 5.25%, where it has remained since August 2023.

“However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price. The top-of-the-ladder sector is still leading the way, while from a regional perspective the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth.

“However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched.”

Bannister said Rightmove expects that the improved market activity levels and conditions this year will result in higher transaction numbers at the end of 2024 than last year.

He added: “However, the extremely lengthy legal completion process is a frustrating barrier to home-movers converting agreed sales into completed transactions more quickly.

“It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market. One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly.”