The pace of house price growth has eased, industry data published on Monday showed, as record prices and a shortage of housing stymie demand.
According to property website Rightmove, the price of properties coming to market rose by 0.8% in the five weeks to 12 June. That was the largest rise for this time of year since 2015, and pushed the national average to a fresh record high of £336,073.
It was, however, down on May’s 1.8% rise and April’s 2.1% hike. Rightmove said high house prices combined with an all-time low in the number of available properties was starting to rein in the market’s “frenetic pace”.
Sales agreed in May were 17% ahead of the same period in 2019, compared to April’s 45% increase. The average number of properties available for sale per branch is 17, a record low and down on the previous month’s 19.
Tim Bannister, director of property data at Rightmove, said: “Buyer demand remains very strong, though with an all-time low in the number of properties available for sale on estate agents’ books and new stock at higher-than-ever average prices, there are signs of a slowing in the frenetic pace.
“Record low interest rates and stamp duty relief have helped many to afford higher prices, satisfying their desire for a new home for a new era. Some of that demand has now been met, and the phasing out of stamp duty relief has taken away some of the urgency to move, though our high traffic and search data indicate there is still strong buyer demand.
“However, higher prices combined with a lack of fresh choice coming to market are reducing some buyers’ ability or desire to move, and while we expect the market to remain robust, there are early signs of a slackening in the incredible pace of activity we’ve seen over the last year.”
Marc von Grundherr, director at London estate agent Benham and Reeves, said: “A 0.8% rise in monthly price rises, while slower in pace than in recent months, is still almost 10% annually if such a trend were to continue. That’s colossal growth and even more so at the top of the market, where homes are seeing over 12% rises in value despite the fact they may soon miss out on the maximum stamp duty holiday saving of £15,000.
“This bodes well and may confound the doomsayers that have been forecasting a cliff edge come the end of June.”
The house market has boomed since the end of the first national lockdown, fuelled primarily by the stamp duty threshold being raised to £500,000 as well homeowners reviewing their housing needs. Originally scheduled to end in March 2021, the threshold will reduce to £250,000 in June before reverting to £125,000 in September.
Rightmove, which claims to advertise 95% of homes for sale in Britain, collated the latest house price data between 9 May and 12 June.