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UK Property: Asking prices soar as buyers flock back to the market after Brexit

Latest data from property search portal Rightmove suggests that the price of properties which have been listed for sale over the last four weeks have reached a new high, rising by 0.8 per cent on a monthly basis, leading to an average increase of £2,589, which is just £40 short of the record high seen in June 2018. This appears to be the result of the number of properties available for sale failing to keep pace with buyer demand, even though the number of new sellers coming to the market rose by 2.1 per cent over the course of the past month.

This uptick in activity has led to an increased number of agreed sales, which are up by 12.3 per cent year-on-year nationally and 26.4 per cent in London.

Many solicitors and conveyancers up and down the country have anecdotally suggested that they are seeing one of the busiest first quarters of the year since 2006.

However, whilst there is a long-awaited and welcome recovery in the number of new sellers coming to market, this is being exceeded by a surge in demand from buyers in many areas, as a result of a post-election release of pent-up housing demand.

Miles Shipside, Rightmove director commented: “There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month. This means that spring buyers are likely to be faced with the highest average asking prices ever seen in Britain.

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House prices: UK asking prices have soared as buyer confidence returns to the market (Image: Getty Images)

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“Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.”

Shipside adds: “Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.

“However, sellers should be careful not to get carried away with their pricing, as this is still a price-sensitive market with stretched buyer affordability.

“Those who over-price risk missing out on the window of increased activity that could run at least until we approach the next Brexit deadline at the end of the year.”

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Edward Heaton, founder and managing partner of property search agency Heaton and Partners, said that: “It’s great to see vitality in the market once again after a year dogged by election worries and low growth. In an uncertain world, certainty suddenly seemed to have been restored.”

But Edward also cautioned: “I would expect any house price rises we’ve seen in January to flatten by the latter part of the year, as attention will inevitably turn to ‘Deal or No Deal’.

“Trade negotiations will unavoidably affect market confidence, both in attracting foreign investors and housebuilders who rely on European materials.”

Tomer Aboody, director of property lender MT Finance is also optimistic: “Rightmove is delivering some more good news about a property market which has been stagnant at best for the past three and a half years.”

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House prices: Agreed sales have risen across large swathes of the UK in 2020 vs 2019 (Image: NC)

“The uncertainty around Brexit, coupled with three general elections since 2016, has meant that buyers and sellers have long been waiting to see what happens on the political front. 

“Now we have a majority government which has confirmed that Brexit will finally go ahead, and this has sparked off a quick frenzy in the market from buyers who have been waiting. 

“Next month’s Budget will be an interesting one with regards to possible changes to stamp duty. If the new Chancellor is brave enough to cut stamp duty, it will give the market a boost, encourage downsizers to sell up and persuade more buyers to take advantage of low mortgage rates and get on with a purchase.”

The Rightmove figures follow a similarly positive narrative from the Royal Institution of Chartered Surveyors (RICS). According to the latest RICS survey of its members, the report based on January data signals continued improvement in both buyer and seller activity, with indicators on demand, sales and new properties being listed for sale all moving further into positive territory.

What’s more, surveyors across all UK regions seem to be optimistic that sales volumes will continue to gain momentum over the next twelve months.

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Simon Rubinsohn, RICS Chief Economist, said: “The latest survey results point to a continued improvement in market sentiment over the month, building on a noticeable pick-up in the immediate aftermath of the General Election.

“The rise in new sales instructions coming onto the market is a noteworthy and much needed development, given the lack of fresh listings over the past few years had pushed stock levels to record lows.

“It remains to be seen how long this newfound market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But, at this point in time, contributors are optimistic regarding the outlook for activity over the next twelve months.”

All in all, it seems that new Housing Minster Christopher Pinscher may find the current property market conditions make for a rather full in-tray in his new office. Whether or not his fresh perspective will unlock any new solutions around how more homes can be built or indeed the ongoing cross-party consultation around the mandatory regulation of estate agents, rather remains to be seen.

Follow Louisa on Twitter: @louisafletcher

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