Asking prices for properties new to the market have shot up to hit an all-time record high for March, boosted by buy-to-let investors “piling into the market”.
Rightmove said this morning that the average new asking price is £239,710 – 1.7% higher than last month and just beating the previous record in March 2008 of £239,655.
Asking prices are now 1.2% higher than this time last year, and compare with the lowest March asking price of £218,081 in 2009.
The figures, published two days before the Budget, may give Chancellor George Osborne some last-minute food for thought.
Miles Shipside, Rightmove director, said: “In today’s turbulent world where economic crises seem more likely to reappear than disappear, any market upturn will take longer to build home-mover confidence to the point that it starts to feed through to actual transactions.
“Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery.
“However, with new sellers asking more than ever before as we enter the traditionally busy spring market, and an expectation among home-movers of price stability or growth, there is now a bedrock upon which confidence and momentum appear to be building.”
According to Rightmove, there has been a 12% month-on-month increase in new seller numbers, but unsold stock per estate agency branch is virtually unchanged at 65 properties, suggesting that more properties have either been sold or removed.
The site says this bodes well for transaction numbers this year – although volumes look to be boosted by buy-to-let activity. Rightmove also says that the average time on the market has fallen from 90 days last year to 80.
Shipside added: “Whilst it is too early in the year to make estimates about full year transaction volumes, agents are reporting more properties being sold subject to contract.
“However, these prospective buyers still have to complete the potentially treacherous journey through to successful completion. A sense of urgency has previously been sadly lacking, but there’s nothing like a few ‘Sold’ boards appearing on local streets to motivate buyers to make a decision about which they had previously been prevaricating.
“More limited inventory for sale by agents means less choice for buyers and is usually a forerunner of increased property prices.
“Some of the price gains made in the first half of the year often fall away in the second half, but this year it is possible that the air of optimism will result in those gains being retained.”
Shipside said that there are currently “blindingly” good returns on the right buy-to-let investment, and that investors are “piling” into the market as a result. Cheap borrowing means they can get immediate returns – and a much better deal than putting money into a bank.
London, as usual, tells a slightly different story. Although new asking prices have shot up in the capital to stand at £496,298, up 1.9% from last month and an astonishing 9% rise since this time a year ago – sellers are dwindling, down 12% on March 2012.
The shortage of supply means that average asking prices are now £41,338 higher than a year ago. In Kensington and Chelsea, the average new asking price is now just over £2.3m, and in Westminster is more than £1.5m.