The website says it has been the busiest half-year ever recorded and
prices have broken new records for the past four consecutive months to reach an average of £338,447.
Over the past six months, prices have climbed by 6.7% and compared to June they are 0.7% higher, which is the strongest month-on-month growth at this time of year since 2007.
Annual growth of 5.7% was not quite as high as the past six-months’ rapid acceleration, which has been impacted by buyers rushing to complete before stamp duty reliefs were stepped down at the end of June.
Rightmove notes that the first half of 2021 saw 140,000 more sales being agreed and 85,000 fewer new listings than the long-term average.
This surge in activity has created a shortfall between demand and supply of 225,000 homes.
The property website says that if these homes had been available for sale it would have corrected the imbalance and stabilised price growth.
The greatest shortfall is in the availability of homes with four or more bedrooms, as there has been a 39% surge in sales versus a 15% fall in availability of homes coming to market compared to 2019, resulting in an average price hike of 6.7% in the last six months.
Sales of three-bedroom homes have jumped by 28%, while supply has fallen by 10%, resulting in prices climbing by 6.9% so far in 2021.
Sales of first-time buyer properties, with two bedrooms or fewer, were up by 26%, while prices rose by 3.4% for the half year.
The average number of available properties for sale per estate agency branch is at a new record low of 16 properties, compared with the previous low before 2021 of 25 properties and a longer-term average for this time of year of 31.
With the ongoing need for housing, high activity levels despite the June stamp duty deadline now passing, and with residential property prices appreciating more strongly than many other asset classes, Rightmove expects positive sentiment to continue.
But it says that there is an urgent need for the low stock of property to recover in order for price stability to return.
Rightmove expects that the number of sales completed in the first six months of the year and due to be reported by HMRC later this week is on course to be around 800,000, which could just beat the previous record of 795,000 set in 2007.
The 2007 record was set under very different circumstances, at a time when mortgage lending criteria were much less stringent than in today’s more controlled market.
Rightmove director of property data Tim Bannister says: “We predict that the number of completed sales will be the highest ever seen in a single month when June’s data is released by HMRC later this week.
“This means it’s likely that the first half of 2021 has seen a record number of moves when compared with the first six months of any other year, induced by the pandemic’s side-effect of a new focus on what one’s home needs to provide.
“That is one of the driving forces behind four consecutive months of new record average property prices.
“Demand has also been boosted by the ongoing creation of new households, and property being seen as an asset to hold, with historically low returns from many other forms of investment.
“New stamp duty deadlines in England and Wales for sales completed by the end of June have also helped to exhaust the stock of property for sale and concentrate activity.
“This has left prospective purchasers with the lowest choice of homes for sale that we’ve ever recorded, continuing price rises, and stretched affordability.”
Bannister adds: “First-time buyers are currently benefiting from their sector having the most buyer-friendly conditions.
“Choice is still more limited when compared to the same period in 2019, but price rises are the most subdued of any sector.
“Saving a deposit is still very hard, but 5% is now an option, and with many paying rising rents, buying your own home on a lower deposit is becoming an opportunity again.
“The opportunity is also there for property owners to come to market, as it’s still a great sellers’ market despite the recent end of the tax holiday in Wales and its scaling back in England.
“We’ve also seen a much more efficient housing market over the past year, with the strong buyer demand and faster churn of homes leading to a much higher percentage of sellers finding a buyer for their home, and fewer unsold homes being withdrawn from the market.
“Buyer sentiment remains strong, and the growth in new households combined with people living longer and having changed housing needs is exacerbating long-term housing stock shortages.”
Agent’s views
Miles & Barr group director Rob Sabin says: “East Kent’s property market continues to be very active over the first six months of 2021 with buyers continuing to purchase the limited housing stock available.
“The number of sellers coming to market has slowed as the year has progressed, which means we’ve seen the level of new listings coming to the market significantly decrease year on year, whilst in turn total available stock levels across the market is at the lowest we have seen in a number of years.
“While the number of new listings has dropped, our results remained strong with 945 homes listed accepting an offer.
“East Kent has also seen the number of buyers looking to relocate to either the countryside or by the coast increase with a fifth of applicants registered coming from Greater London.”
Benham and Reeves director Marc von Grundherr says: “The UK property market continues to defy expectation, with house prices reaching yet another record high despite whispers of a decline in values as a result of the tapered stamp duty holiday deadline.
“There’s no doubt the stamp duty holiday has been the catalyst for this impressive market performance.
“However, it isn’t the driving factor behind the intent to purchase for UK homebuyers and so a robust level of activity will remain long after it has expired.
“When you couple heightened demand with a severe shortage of stock, it’s very likely that property values will remain buoyant for the remainder of the year, at the very least.”
