Miles Shipside, Rightmove director and housing market analyst, comments: “Higher prices stretch buyers’ willingness to pay or ability to afford them. This month’s increase of 0.4 per cent is the lowest at this time of year since 2008, though the subdued figure could partly be a re-balancing from the seasonally large 1.5 per cent rise the previous month.”
However, different parts of the country and different sectors continue to operate at different speeds.
The North West has the strongest annual rate of price increase (+4.3 per cent) and is one of six out of 11 regions that have hit new records.
The others are the East Midlands (+4.2 per cent), Yorkshire & the Humber (+2.7 per cent), South West (+2.6 per cent), Wales (+2.4 per cent) and the East of England (+1.2 per cent).
Typical first time buyer properties with two bedrooms or fewer are up by 2.2 per cent average year-on-year, while the sector favoured by second-steppers, mainly comprising three-bedroom properties, sees a 2.7 per cent rise.
In contrast, the more expensive top of the ladder category, typically detached with four bedrooms or more, has a more muted annual rate of increase of 0.9 per cent and is still behind its peak set in October 2017 (£542,347).
Shipside observes: “In the more popular locations and for the property with the right specifications, buyer demand is helping to push prices higher. A lack of choice is nudging prices up to test the ceiling of what the market will pay. It’s not rampant price inflation, and buyers can easily spot a speculative price and ignore a property that is out of line with others nearby, and is also likely to be out of kilter with their pocket.”
Rightmove analysis shows that the actual selling price being achieved nationally is 96.7 per cent of the final asking price.
Based on the current new seller asking price of £305,732, this would mean an average difference of over £10,000 - indicative of some sellers demanding unrealistically high asking prices, the portal claims.
Nationally this percentage gap has increased from 2.8 to 3.3 per cent over the past two years, evidence of a more challenging market in some locations.
At a regional level there have been some interesting and greater shifts. In the West Midlands, the price achieved has risen from 96.4 per cent of the final asking price in 2014 to 97.5 per cent in 2018, making it the strongest region outside Scotland for achieving near asking price.
In London, sellers were achieving 98.9 per cent of the asking price back in 2014, and that has fallen to 95.6 per cent this year, meaning a current difference of over £27,000 on the new seller average asking price in the capital of £628,039.
Shipside advises: “The average gap of over £10,000 between the final asking price and the price the home actually sells for is a national average and can only be tracked on properties that have actually sold. Property that is over-priced and has not yet sold may need to be priced more attractively in order to attract a buyer in the first place."
He added: "As a buyer, doing your research before you decide what to offer is essential, as the market is often hyper-local with prices depending on local supply and demand and how sensible sellers and their agents are with their asking prices. As a seller, if your property is initially over-priced, you may find it much harder to achieve a sale at any price as increasingly price-sensitive buyers might just ignore it.”