Strong demand ahead of a potential base rate rise – Rightmove

Every region of Britain saw residential property asking price records broken in October, as the national average increased almost £5,000.

It was the first time that every region broke asking price records since March 2007, according to Rightmove’s monthly house price index.

The typical asking price for a home has jumped in all regions of Britain, and now sits at a national average of £344,445, up 1.8% month-on-month, which is the biggest increase at this time of year since October 2015.

The North West and Wales both saw especially strong growth in asking prices amounting to 2.3%. They reached £232,639 and £237,830 respectively.

The South West and London both saw a 1.9% monthly increase, with prices reaching £359,906 and £650,683.

The number of sales being agreed was up more than 15%, compared to the same time in 2019.

Rightmove put the increase down to property purchasers wanting to secure their new homes ahead of a potential base rate rise, which is looking increasingly likely for later this year.

Tim Bannister, Rightmove’s director of property data, said:“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.

“This ‘full house’ is an extremely rare event, happening for the first time since March 2007. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.

“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”

 

Property industry reaction to Rightmove House Price Index

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21 Comments

  1. Property Ear

    Boom bust now a likelihood?

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  2. Property Poke In The Eye

    Rightmove will obviously talk the market up as they don’t want agents to close shop.

    The reality is the stamp duty holiday has distorted the market.  A  correction needs to take place and the next few years will be tough ones.

    From, energy bills to food bills – its all rising.   So property will be the last thing on people’s minds.

    Survival of the fittest in the coming years.

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    1. scruffy

      With respect, I don’t believe that the Stamp Duty holiday had such a distorting effect. In the preceding years prior to the election of December 2019, second home and retirement buyers were largely sitting on their hands in the context of the uncertainty surrounding Brexit ever since June 2016, and investment purchasers were coming to terms with the effects of tax changes on both sale, lettings income and on purchase.

      With the election behind us and investment purchasers realising that little else offered such a return in an ultra-low interest rate environment, demand picked up from all three sectors in January 2020 before the pandemic struck. Its effect was to build up an even greater pent-up demand during the lockdowns, as well as introduce a pandemic related new buyer group: i.e. those able and willing to seek more space further away from their place of work as a result of changed working practices.

      Hindsight may suggest that the Stamp Duty holiday was unnecessary, but it provided a welcome boost to an industry sector that, in 2019 in particular,  had endured a torrid time due to Brexit votes and the election. I do not subscribe to the view that it was the sole cause of the distortion referred to, nor that it will be so short-lived, for the reasons above. Time will tell, but like the triggers for panic buying, let’s not talk ourselves back into such a boom-bust cycle

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  3. Robert_May

    Does it mak sense to  suggest listing volumes and  completion volumes are used to add some balance to  this story

     

    If transactions  slow down or stop it doesn’t matter what happens to prices, if an agent is not completing on sales they have nothing to pay the bills.

     

    The pro version of r4p, (system we built to monitor portaljuggling) shows an alarming stat; when the market was bubbling along normally about 1/3rd of agents had registers that didn’t  sensibly cover their portal spend. Taking one outcode selling area  now  23 of the 31 agents (74%) who cover the area now have sales registers that  do not warrant spending £1100  ARPA on a portal.

    If an agent needs to sell 5 homes to cover their fix costs every month, it does not matter what happens to prices, total listing volumes and  then  sales to listing stats are an indication that a lot of agents  cannot justify their portal spend.

    The fear of not being on a portal because of what the competition say, has to be considered in the true light of what the competition are actually doing, they’re forcing agents to spend money they have not got on an expense they cannot afford.  Allowing  your competition to control your marketing spend is never right.

     

     

     

     

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    1. Bosky

      “Allowing  your competition to control your marketing spend is never right.”

       

      I think there is a fine line between control and influence.

      It is inevitable that, in some way, your competition will influence ones marketing budget. Most agencies are followers, not leaders, so will see business sense in peddling their wares in the same place. In the days where shop fronts were crucial to estate agency, there was good business logic for a new agency in opening next to an established agency.

      When we are reviewing our portal needs, we assessed which portal (RM v Z) was showing more property in our area, OTM was in its infancy then so not included, and Z had less than half of RM, so discontinued with Z, ergo our competitors influenced where we spent our marketing budget. Last week I checked to see if there had been a shift, and RM still had far more property to offer than Z.

       

      Today’s mantra:- Follow the follower.

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      1. KW

        How many properties would you need to sell to make 30k a year? that’s a discussion we just had. That is roughly what it costs us for some pictures and text on a website! Think about it!!!

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        1. Bosky

          That might be what it costs you, but not me!

          Anyway, depends on where in the UK one is operating; 30k can be earned by selling 3-4 properties a year, and that is not based on London prices.

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          1. KW

            May i ask what you do pay? Also, how about if we factor in the actual cost of sale, valuer’s time, admins, marketing, photography and so on. I know a couple of agencies whose fees run in to hundreds of thousands a year. Yes they are multi-branch but seriously?? Oh and I know people will prattle on about well back in the days of newspapers the cost was much higher… But it cost far more to produce a newspaper than it does to maintain a single website (someone prove me wrong here) it is NOT the yardstick we should be using today as it is like comparing stones with water.

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            1. Bosky

              Sorry, no can do, contractual obligation to not disclose fee.
               
              Ironically, it is the agent’s lack of applying the consummate skill that should be the cornerstone of the very people that own and run such businesses that has allowed RM to achieve the fees they charge.
               
              As for cost differential of maintaining a property portal website vs newspaper, have no idea, but it would not surprise that it costs more to maintain a website. There is so much more to a website such as RM than creating it in the first place.

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              1. Dick Value

                ‘contractual obligation to not disclose fee’, sure!

                 

                You’re anonymous on here so what’s the problem with you discussing a fictional deal?

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              2. Robert_May

                Calculating the cost of running a portal is only a case of reworking the numbers in the annual statement.

                 

                At the time of  say no to Rightmove I calculated the fixed cost to be about £231/ branch, an extortionate figure compared with running a modern PSP (property search platform)

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  4. smile please

    People have been saying rates will go up for over a decade now.

    Sooner or later the broken clock will be right.

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  5. Countrybumpkin

    Here goes the tail wagging the dog again. Rightmove stick to us being your customer please and don’t talk the market down on your customers behalf. By the way the customer is the one who pays you a monthly subscription that has just been increased.

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    1. KW

      This Rightmove bashing has been going on since I was a nipper (I wish, grey hairs tell a different story!!) and its the same old same old. We came off RM a while back (and Zoopla only recently) as things are tight in our area with few coming on to the market and we don’t want to be caught short should things go t**s up by being tied into year long contracts at the rates they charge (over 30k a year in our case). We moved back to OTM and are also in discussions about giving some of the new entries a go but certainly not boomin for reasons I have expressed many times. By the way, what a joke they are if they think we can’t see through the sudden surge of 5 star reviews on trustpilot. That site should be banned until they get their act together to tackle fake reviews! Robert, did you give up on r4? we don’t see much about it any more. All agents need to finish what the saynotorightmove campaign started and start trialling all the newbies. Just doing that alone can break the stranglehold and if one of them sticks its win-win for us all. Don’t think Zoopla is your friend here either by the way, they are a trojan horse. Just look at what the company who owns Zoopla in the US are doing (zillow) whereby they are cutting agents out. It’s only a matter of time before it happens over here. I don’t think there should be one dominant portal EVER as there needs to be fair competition and we need to cater for the different preferences of the public, particularly newer generations who want a different approach than what’s currently out there. I know I have gone off topic, but we all need to come together on this otherwise this time next year many of us will be out of business. If someone has a good list of the alternatives it would be a start.

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      1. PeeBee

        KW

        Robert certainly hasn’t given up on rummage4.  May I suggest you look him up on Twitter where he posts as @Robert_May_

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      2. Robert_May

        Still here, still innovating, still driving change. You should have a look.

         

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  6. Andrew Stanton Proptech Real Estate Influencer

    1988

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    1. KW

      ?????

      Can you enlighten us please

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      1. Robert_May

        August 1st 1988 was the  start of  the MIRAS winter, a sales drought that lasted till 1994. Double MIRAS relief was withdrawn on that date. When the ending of the relief was announced it sparked a feeding frenzy that had property prices rising 10% a month.

        Once  double MIRAS was withdrawn the market took 5½ years to  get back to normal. It was a torrid time to be an agent.

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  7. KW

    Hi Robert, good to see you are still fighting our corner mate. Can you share on here what you are doing please? Is there any way the other portals that are not known can do same? can PIE tell us who they are? Can anyone? I have a handful I think we should give a go, if anyone can add to it it will be welcome.

    onedone.com

    openbrix.com

    primelocation.com

    wiggywam.co.uk

    homesearch.com

    There must be more than the list I have.

     

     

     

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    1. Robert_May

      I am not ignoring your post but  Property industry Eye is a trade publication run for the benefit of its owners, as are EAT and the Negotiator.  They have a right to publish, not publish what they like.

       

      Twitter isn’t like that, individuals control the content

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