House prices to rise before interest rates do?

Property website Rightmove has confirmed that average house prices across England and Wales now stand at £313,435, a 1.1% increase compared to the previous month and the biggest increase seen since 2014. Apparently every October there is an increase, as buyers are eager to move in for Christmas, but this month is the biggest since a 1.4% rise in October 2014.

Director at Rightmove Miles Shipside said that many news sellers are eager to agree a sale before Christmas but also expressed a note of caution: “It will be harder for this Autumn’s sellers to secure a sale because buyers have more choice with a 3.1% increase in new seller numbers compared to this time a year ago.” The average time for a house sale according to rightmove is 63 days from first advertisement.  The quickest selling properties are those in the “second stepper” phase, whereas first time buyer type properties sell at an average of 62 days. Lenders are still promoting record low rates for both mortgage and unsecured loans rates so is this ultimately driving prices up?

Shipside noted further: “Sellers looking to find a buyer before Christmas have a head start if they are selling a property in these two mass-market sectors, as that is where there is the greatest demand. However, with buyers’ average wage rises often falling behind retail price inflation, and with a rise in interest rates being more heavily trailed by the Bank of England, sellers in these most popular sectors should still be wary of over-pricing. Buyers will be looking for the best buy on the market in their desired area either in terms of price or quality of finish.”

The toughest properties to sell are larger homes, at the “top of the ladder” which take an average of 76 days to sell, notably in London where the average is 86 days. Shipside commented that: “Sales agreed numbers are holding up better in the north, whilst a common factor throughout the country is the lower and middle market sectors being the most active. However, where property prices have far outstripped buyers’ wages, and consequently their affordability, sellers will either have to be more tempting with their asking prices or outscore other properties with extra desirable features.”