Lack of new building and high numbers of landlords pushing house prices up
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New house sellers’ asking prices jumped by more than £5,000 in February amid a lack of choice of quality homes for house hunters to trade up to, property website Rightmove has reported.
The average asking price for a property across England and Wales was £279,004 this month, marking a 2.1% or £5,729 increase on January.
As the housing market continues to pick up heading towards spring, Rightmove reported seeing more than 100 million visits to its website in January, which is a new record for the site. The busiest days the website has ever seen were on Sunday January 25 and Monday January 26.
But as interest in the market heats up, some estate agents are reporting their lowest ever stocks of quality property for sale, Rightmove said.
Its report put this down to several factors, including a reluctance among people looking to move to put their own property on the market as they can see few suitable homes to buy.
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The website said that underlying factors could help to make the tightness of supply “the new norm”. It pointed to a lack of homes being built, as well as an increase in homes being owned by buy-to-let investors, who tend to be buying a property as part of a long-term plan and are more likely to keep it for longer than an owner-occupier would.
Reforms which will give people aged over 55 more freedom over their pension pots from April onwards have prompted further enquiries from older people to estate agents about the possibility of investing in a buy-to-let property to supplement their retirement income, the report said.
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Rightmove, whose survey started in 2002, said the average available stock for sale per estate agency branch for the last two months has never been lower on its records at the start of the year than in 2015. Some 57 properties were on the market per branch in December, increasing to 58 per branch in January.
The website said that new seller numbers this month are also 4 percent below those recorded in the same period in 2014.
All regions across the country have seen asking prices increase over the last year, with London seeing a 9.7 percent year-on-year increase and an average price of £582,483.
Miles Shipside, Rightmove director, said: “Many who are contemplating moving will have noticed a lack of suitable property for sale in their area, and may be hoping that it’s a temporary shortage.
“What they may not fully appreciate is that this is the new norm, and is the consequence of over 20 years of not enough homes being built to meet the burgeoning growth in household numbers, resulting in a lack of quality homes for sale in many popular areas of the UK.”
Rightmove said that in popular areas where supply is tight and more people are battling over fewer homes, people planning to trade up need to change tactics.
It said that while sellers might achieve a higher price for their home, the property that they are buying is also likely to cost more.
The website said that while the idea of selling your home subject to contract before finding another property and having an offer accepted might sound concerning, with less property to choose from, home owners need to have a buyer in place for their property in order to be treated as serious buyers themselves.
It also said that when supply is tight buyers should resist feeling pressurised into buying a property that does not suit their needs.
Mr Shipside continued: “You might think of postponing your moving attempt until there’s more choice available, but the likelihood is you will still have to contend with fewer available properties for sale in the future, unless by massive investment or magic we create more homes to match housing demand.
“The issue is down to a lack of private, affordable and social housing, and what it will take is a focus on long-term provision to address the nation’s housing needs.”