The Brexit vote jitters has not dampened the housing market as figures showing new sellers in England and Wales asking 3.3% more for typical starter homes than a month ago.
The latest monthly report by property website Rightmove showed asking prices for newly listed homes were 0.7% higher – now an average of £306,499 – September than in August. However, the headline rate masked a sharp jump in the price being asked for properties with two bedrooms or fewer. While in August, sellers bringing such homes on to the market asked an average of £188,237, Rightmove said the latest listing price averaged £194,477.
“The rising tide of prices is marooning more and more first-time buyers, out-stripping their ability to meet stricter lending criteria and afford the required deposits and monthly repayments,” said Miles Shipside, director at Rightmove.
“Increasing numbers are being cut off from home ownership altogether and while schemes are in place to help, the additional demand they create is not matched by available and affordable supply.”
Sellers’ confidence appears to have grown across all parts of the market over the past year, although first-time buyers have experienced the biggest price inflation. Rightmove’s figures – based on more than 130,000 properties listed on its site – showed that while across-the-board asking prices are up by 4% on last September, first-time buyer homes are now being priced 10.5% higher. For the category Rightmove calls “second-steppers” – three- and some four-bedroom homes – asking prices were up by 5.2% year-on-year, while at the top of the market they were up by 2.7%.
Asking prices had dropped following the UK’s vote to leave the EU, but recent data has suggested the return of confidence to the market. Recently the Royal Institution of Chartered Surveyors (Rics) said its members were expecting house prices to rise over the next three months. Rightmove said that visits to its site in the first week of September were 8% higher than in the same period in 2015.
Shipside said: “While the referendum result has created additional downwards price pressure in some upper segments of the market that were already slowing, those who do not own a home and arguably have the greatest housing need are now finding it harder to achieve their goal in the post-Brexit-vote aftermath.”
Asking prices have risen month-on-month in five out of 10 regions, and unchanged in two more, according to Rightmove. In Yorkshire & the Humber, north-west England and in Wales new sellers were asking less than in August, but were still higher than in September 2015. In Greater London, prices increased by 1.9% over the month, to an average of £630,974. Annual growth rates in the capital continue to be highest in the most affordable areas, with Havering on east London’s border with Essex recording the biggest rise of 11.9%.
Across the country, the biggest annual rise was recorded in the east of England, where prices have been pushed up by a ripple effect from London. Asking prices were 7.9% higher than in September 2015, reaching an average of £337,252.