Good news as capital values see unexpected leap...

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22 May 2023

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Good news as capital values see unexpected leap

Landlords relying on capital appreciation have good news this morning - there’s been a significant and unexpected leap in house asking prices.

The latest data from Rightmove shows that new seller asking prices jump by 1.8 per cent or a typical £6,647 this month, compared with the historical average May rise of 1.0 per cent.

The portal says this a new record high of £372,894 as sellers respond with increased pricing confidence to a market that is defying start-of-the-year expectations.

With buyer demand three per cent higher than in 2019 and sales agreed just three per cent behind 2019’s levels, this positive activity has belatedly filtered through to new sellers’ asking prices.

However Rightmove cautions that the current multi-speed, hyper-local market is still price-sensitive, and buyer affordability is still stretched. Whilst increased seller pricing confidence in the first-time-buyer and second-stepper homes sectors has more justification, there are some signs of over-optimism in the high end sector.

“This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season” explains Tim Bannister, Rightmove’s Director of Property Science.

He claims the gloomy start-of-the-year predictions for the market are looking increasingly unlikely.

And he adds: “What is much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years.

“Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come.

“The market is still very price-sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically-priced new instructions that are selling best.”

The average discount from the final asking price to the agreed sale price has steadied at an average of 3.1 per cent, in line with pre-pandemic market levels.

The number of buyers enquiring to agents about homes for sale is now 3.0 per cent higher than at this time in the last more normal market of 2019. This is led by the first-time-buyer and second-stepper sectors, with buyer demand now six and three per cent above pre-pandemic levels respectively.

However, Rightmove suggests there are signs of some over-optimism in the top-of-the-ladder sector, which has the fastest-rising prices this month despite buyer demand in this sector being one lower than at this time before the pandemic.

While properties in this largest-homes sector are still selling faster than in 2019, it is now taking an average of 67 days to agree a sale, nearly double the 35-day average at this time last year. This is the biggest increase in the time taken to find a buyer, with second-stepper properties now taking 52 days on average compared to 28 days last year, and first-time-buyer properties now taking 53 days, up from 35 days a year ago.

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- Michael Foley
- 22 May 2023 07:09 AM
Capital Values irrelevant more than gobbled up by ever increasing requirements, regulation + interest rate hikes and long term landlords can’t sell anyway because of no indexation or taper relief paying taxes on imaginary money.