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Property prices and sale speeds hit record high in May

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  • 20/06/2016
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Property prices and sale speeds hit record high in May
The average price of homes coming on to the market has hit a record high, driven by a lack supply and the rush to purchase buy-to-let properties.

Data from property website Rightmove revealed that the average price of properties entering the market in May was up 0.8% on April to £310,471, with prices rising every month in 2016 in the build-up to the Brexit referendum.

This contrasts with the run-up to the May 2015 general election when electoral uncertainty resulted in a price fall of 0.1% in the month of the election, said Rightmove.

Miles Shipside, Rightmove director and housing market analyst, said the lack of supply has influenced buyer’s decisions to buy more speedily at a time of political uncertainty.

“Most seem to be getting on with the certainties they can control, namely if you find a suitable property snap it up,” said Shipside.

“Indeed the figures for average time to sell indicate that properties are being snapped up more quickly than ever.”

The average number of days to sell in May was 57, down from 60 the previous month and 65 in the same month a year ago, based from when a property is first marketed on Rightmove to when the estate agent marks it ‘sold subject to contract’.

“With today’s tighter lending criteria, marking a property as sold before you’re certain that the buyer has the means to pay for it could mean missing out on other more suitable purchasers,” said Shipside.

“It takes time to check that a prospective buyer can get a mortgage, and ensure that all other buyers in the chain are also in a position to proceed. In spite of these extra delays and necessary diligence, the length of time to sell is the lowest we’ve ever measured.”

Shipside said that this does not, however, mean that sellers can be over-ambitious on their asking prices, as buyers’ affordability is increasingly stretched.

“If you set too high a price your property can become stale and be ignored by suspicious buyers even if later reduced to a more sensible figure,” he said.

“Given that housing markets dislike uncertainty, which could become a reality in the event of a Brexit vote, any dampening of buyer activity might mean that more realistic pricing would be an even more critical factor to achieve a sale.”

In what has been referred to as signs of uncertainty, fewer new sellers were recorded as coming on to the market in May, with the monthly average down 5.3%. The most reluctant were said to be owners of ‘large’ homes or those with four or more bedrooms, with the number of these properties coming to the market dropping by 6.6%.

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