Surge in sales down to stamp duty holiday
and ‘race for space’
as Rightmove predicts 7% rise in prices for 2020
For the first time, estate agents are listing more homes as sold than they have for sale. Photograph: Paul Springett A/Alamy Stock Photo
In London, travel restrictions appeared to have hit overseas demand for homes in upmarket neighbourhoods such as Kensington and Chelsea, Westminster and Camden, which covers pricey streets alongside Regent’s Park. Sales of £1m homes in these boroughs were down by 10% for the year.
The average asking price of homes coming on to the market in Britain has hit a record high, according to figures from the property website Rightmove, and for the first time estate agents are listing more homes as sold than they have for sale.
The website’s monthly snapshot of new listings showed sellers are asking for an average price of £323,530, an increase of 1.1% since last month, and 5.5%, or £16,818 more than this time last year.
It is the latest in a string of reports showing a booming housing market fuelled by temporary stamp duty holiday and a so-called “race for space” as households have reconsidered their lifestyles during the coronavirus pandemic.
Rightmove said homes were changing hands quicker than ever, leaving agents with more properties marked as sold than available for sale.
However, it said there were signs that activity levels may be easing off. In September, the number of sales agreed was up by 70% year on year, but the figure has fallen to 58% in October.
The website said that its forecast of a 2% rise in asking prices made in December 2019 now looked “too timid” and that it was revising up its estimates for 2020 to 7%.
Rightmove’s data shows that asking prices have risen across the board but that the biggest monthly move has been in what it calls “top of the ladder” properties, typically four-bedroom detached and larger homes.
These properties are now going on the market for an average of £575,594, a rise of 2% on last month’s figure. In England, where the stamp duty holiday applies to properties costing up to £500,000, these are homes where buyers will benefit from £15,000 in tax savings.
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.”
However, he warned that although many buyers seemed willing to pay record prices, “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”.
Separate figures from property firm Savills also showed strong activity at the top of the housing market, with a rise in sales of homes costing more than £1m.
An average of 868 £1m-plus sales have been agreed each week since the beginning of June, 66% higher than the weekly average over the same period in 2019, data from Savills and agency TwentyCi show.
The Cotswolds recorded a 94% in increase in deals over the period, followed by nearby South Oxfordshire, up 78%, then Dorset, up 69%, Savills said.ign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Sales were up in areas of the capital where money buys more space, and as a whole the city recorded 4% more high-end homes changing hands than in 2019.
Lucian Cook, Savills’s head of residential research, said: “Lifestyle relocation has been a big theme in the market since lockdown began to ease, and this is very clearly reflected in the numbers.”
Cook predicted that by the end of the year there will have been more £1m-plus sales than in 2019, “a performance nobody could have anticipated in the depths of lockdown”.
“That said, recent evidence suggests fewer high-value homes are now coming to the market, suggesting we may be hitting a high plateau,” he added.