Rightmove says house prices jumped by £2,587 in September

Rightmove says house prices jumped by £2,587 in September

14:36 PM, 26th September 2022, About 2 months ago 1

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The average price of property coming to the market grew by 0.7%, or £2,587, in September to £367,760, the Rightmove House Price Index reveals.

The figures show that middle and high-end market sectors are driving price rises, with a new record average asking price of £340,513 in the ‘second-stepper’ category – that is three bedrooms and non-detached with four bedrooms.

Rightmove says the market remains ‘surprisingly resilient’ – despite growing economic pressures.

Other highlights from their report include buyer demand is up 20% on the pre-pandemic five-year average, and the stamp duty cut could stimulate some more demand over the next few months.

66% of homes are now exempt from stamp duty

The stamp duty cut from Friday’s mini-budget means that two-thirds of homes (66%) are now exempt from stamp duty for first-time buyers in England, and a third of all homes are exempt for all buyers (33%).

Average monthly mortgage payments for new first-time buyers are currently £1,057, which is 40% of an average gross salary for the first time since November 2012.

They will jump to £1,114 per month if lenders pass on the latest interest rate rise of 0.5%

Plus, the number of homes coming to market has risen back to 2019 levels, giving buyers more choice.

Buyer demand in these sectors is up by 2% even compared to the ‘frenetic market’ of last year, while more choice is now also available compared with 2021.

‘The housing market continues to be extremely resilient’

Tim Bannister, Rightmove’s director of property science, said: “The housing market continues to be extremely resilient even in the face of the economic headwinds that are stretching household finances.

“The rising cost of living is increasingly playing a role in some buyers’ considerations, as they look at their budgets and what they can afford.

“Demand has been softening over the last few months, but Friday’s announcement is likely to stimulate some more demand.

“If it does lead to a big jump in prospective buyers competing for the constrained number of properties for sale, then it could lead to some unseasonal price rises over the next few months.”

‘Cuts to stamp duty may provide a temporary uplift to demand’

Phil Tennant, the chief operating officer at iBuyer UPSTIX, said: “While cuts to stamp duty may provide a temporary uplift to demand, it’s a drop in the water compared to the impact that rising rates and strained household budgets will have on the market.

“By moving quickly, homeowners who have benefited from the recent period of rapid price growth can catch the market before it plateaus – or possibly dips.”

Gary Wright, the co-chief executive of payment technology firm flatfair, said: “The latest house price figures don’t show the slowdown that one might expect following rising interest rates and constricted household budgets.

“And with recent stamp duty cuts paired with no meaningful movement on supply-side reform, it’s likely prices will rise further.

“All this means that renters are left in the lurch – lower stamp duty won’t make it any easier for first time buyers in the vast majority of cases, and the affordability crisis leaves the housing ladder out of reach for many would-be homeowners.

“As the balance shifts away from homeownership towards renting, private sector tenants are a policy blind spot for central government that it would do well to address.”

‘Matter of time before the real pinch is felt’

Tomer Aboody, a director of property lender MT Finance, said: “Although the housing market is standing strong against inflation and higher mortgage rates, it’s only a matter of time before the real pinch is felt across the board.

“The Government may have introduced assistance aimed at helping first-time buyers in particular with adjustments to stamp duty but this can only help in the short term.

“Those who took out two-year fixed-rate mortgages in the midst of the pandemic and are now refinancing are facing mortgage payment hikes of up to three times what they initially paid.

“This is having a huge impact on wallets, especially as the cost of living is also going up. The housing market will follow suit and adjust accordingly.”



Comments

wyn kyaw

19:48 PM, 26th September 2022, About 2 months ago

This price will come down soon. UK house price has reached peak level. 2-year bond yield up to 4.49%. Jumbo rate hike on the way. £ depreciated. Now some mortgage providers are withdrawing their products from the market. Many mortgage offers will be above 5% by next year. House builders' shares are being sold off today. Headwinds are ahead. House price correction is ahead.

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