House asking prices have hit a record high - but will they keep on rising?

Tuesday, 20th October 2020, 10:14 am
Updated Tuesday, 20th October 2020, 10:14 am

A surge in house sales and a so-called 'race for space' among buyers has led to record high asking prices for homes in the UK.

According to new figures from property website Rightmove, the stamp duty holiday and a rise in buyers seeking roomier homes in response to the pandemic has led to record high prices - around a seven per cent rise in 2020.

The surge in house buying has meant estate agents are listing more homes as sold than for sale for the first time, with houses changing hands quicker than ever.

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Average asking prices in 2020

Rightmove revealed that sellers in 2020 are asking for an average price of £323,530, representing an increase of 1.1 per cent on last month, and 5.5 per cent (£16,818 ) more than the same time in 2019.

Data shows that 'top of the ladder' properties - typically detached, larger homes - have seen the biggest monthly rise in moves.

These properties are on the market for an average price of £575,594, an increase of around two per cent on last month. Thanks to the stamp duty holiday in England, which applies on properties up to £500,000, buyers of these homes will benefit from around £15,000 in savings.

House sales on the downturn

In spite of this, Rightmove also observed some evidence that activity levels may be decreasing.

In September, agreed sales were up by 70 per cent year on year. This figure has now fallen to 58 per cent in October.

Nonetheless, Rightmove has revised its estimate - made in December 2019 - of a two per cent rise in asking prices to seven per cent for 2020.

Tim Bannister, Rightmove’s director of property data, said, “Prospective buyers are seeing properties selling fast and prices rising as they search for their next home adding to momentum and spurring them on to act quickly.

“With the number of buyers contacting agents still up by two-thirds on a year ago, there is plenty of fuel left in the tank to drive further activity in the run-up to Christmas and into next year.”

He did warn, however, that some sellers are getting overly-optimistic with price expectations.

“Agents are commenting that some owners’ price expectations are now getting too optimistic, and not all properties fit the must-have template that buyers are now seeking," said Bannister.