Home asking prices near record high

Published: Monday 16th March 2015 by The News Editor

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House sellers’ average asking prices are just £30 below their all-time high levels as a lack of choice for buyers adds to the upward pressure on values, Rightmove has reported.

And as people aged 55 and over prepare to get their hands on their pension pots from next month as a result of new freedoms introduced by the Government, the property website said that a rise in retirees looking to snap up buy-to-let properties could drive house prices higher.

The average new seller asking price across England and Wales was £281,752 in March, which is 1% higher than the previous month and £30 below an all-time high recorded in June last year, Rightmove said.

It said that b uy-to-let investors cashing in their pension pots to raise larger deposits may drive prices up further at the “starter home” end of the market, meaning first-time buyers could face tougher competition for homes.

Estate agents have already reported an uplift in interest from investors ahead of the new rules coming into force on April 6 which will give people the freedom to take their pension pots how they like.

Rightmove director Miles Shipside said: “Agents report a high level of interest from new landlords, or ‘granlords’, who are typically first time, retirement age, buy-to-let investors.

“With the highest returns for the lowest investment being at the lower end of the market, the first-time buyer property sector will be the greatest recipient of any increase in demand from investors with substantial pension pots.

“Unfortunately flats and terraced houses with two bedrooms or fewer are coming to the market in smaller numbers than the middle and upper tier sectors, so are the least prepared for an upsurge in demand.”

Rightmove said the asking price for a typical first-time buyer home has already increased by 7.6% over the last year to reach £169,414 on average.

Looking across the regions, the East of England has seen the strongest year-on-year upswing in sellers’ asking prices, with average prices 8.8% higher than a year earlier, taking them to £297,863.

This was followed by the South East, which has seen an 8.2% increase in asking prices over the last year, pushing them to £369,600.

London has seen a 5.5% annal increase in asking prices, taking the typical price tag on a property in the capital to £580,308.

The North East was the only region to record a year-on-year fall in asking prices, with a 1.1% decline taking them to £143,238.

In Wales, the average asking price is £169,477, marking a 0.2% year-on-year increase.

Estate agents said that older property investors would be a welcome addition to the market.

David Blythman, managing director of Scottfraser in Oxfordshire, said he viewed first time, retirement age, buy-to-let investors as having a positive impact on the quality of the private rental sector “as they have no intention of squandering their hard earned funds on anything other than the best properties”.

Ken Hume, of James Alexander in Norbury, south west London, said: “We’ve had enquiries from a number of older people considering buy-to-let which is likely to have an effect this year, with interest expressed particularly in smaller flats where yields are higher.

“As this end of the market is not as busy in our local area, these buyers are a welcome addition, especially as they are often 100% cash.

“The bank of mum and dad continues to be an important resource for many of our younger buyers, some not so young as well who just do not have the resources to fund a deposit without this assistance.”

Published: Monday 16th March 2015 by The News Editor

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