Brian Murphy Head of Lending for Mortgage Advice Bureau comments:
“The monthly Rightmove House Price Index provides us with a current snapshot of consumer sentiment and activity in terms of the UK property market, rather than historical data using completed transaction figures. As such, it would appear that we are continuing to see a diverging market with London experiencing a cooling in terms of both values and buyer activity, yet other areas seeing ongoing upwards pressure on pricing due to lack of available properties for sale against significant demand.
Against that context, it’s not surprising that the average UK asking price has reached a new high, as for vendors in those areas where supply is tight, there is of course a temptation to test the water with a higher asking price. However, what our mortgage advisers are seeing at the coalface is not only that properties which are being marketed at an ambitious marketing price are taking much longer to sell, even in areas of high demand, but also that the vendor then opens themselves up to the potential of the property being down-valued at survey stage. At the end of the day, buyer affordability can and will only stretch so far, therefore the more circumspect vendors who are pricing realistically are those who are securing a buyer quicker and also have more chance of the deal completing in a timely fashion.
It's also interesting to note that the Rightmove report seems to suggest that buyer confidence – and in turn, asking prices – would appear to increase the further out from the Capital that one looks. Certainly in comparative terms, the time taken to secure an offer would seem to be far quicker in other areas of the UK, such as Scotland, the West Midlands and the South West, than it is in London. Then there is also the fact that across the rest of the UK the average completion price achieved versus asking price would appear to have increased in the last four years, whereas in the Capital the same metric would appear to be in negative territory. Certainly, it would seem that this is a continuation of what we observed the previous month, and until such times as we see a significant uptick in terms of more properties coming onto the market in areas of high demand, it’s likely to be ‘more of same’ next month too.”
Read the full Rightmove report here.