Average price tag on a home jumps by nearly £3,000 | Personal Finance | Finance

The average price tag on a home leapt by an impressive nearly £3,000 in September, says Rightmove. Nationally, the average asking price for properties newly listed is now £370,759, up 0.8 percent or £2,974.

It’s normal for September to show a month-on-month uptick in house prices, but this year’s growth of 0.8 percent is notably double the seasonal average.

This sharp increase is linked to a recently revitalised housing market over the summer, contrasting with the more subdued conditions seen at the same time in 2023, Rightmove notes.

Several factors are driving the current autumnal surge in the property market. Lower mortgage rates, an expansion in property choice available, and wages rising quicker than both house price inflation and regular inflation have been highlighted in the report as positive indicators giving the market vitality.

Despite these favourable trends, future uncertainties remain, including speculation about when the Bank of England might implement another base rate reduction on the heels of its recent dip by a quarter percentage point, along with potential policy shifts announced in the awaited October Budget, Rightmove indicated.

Tim Bannister, Rightmove’s director of property science, commented: “The autumn action has started early with a strong rebound in activity from both buyers and sellers compared to the subdued market at this time last year, continuing the momentum from the better-than-expected summer market.”

“The certainty of a new Government followed by the first (Bank of England base rate) cut in four years invigorated the market, opening a window of opportunity for movers to act.

“Some of this will be pent-up demand from those who had to hit the pause button until now. However, windows of opportunity tend to need a momentum of good news to stay open, and there are still uncertainties ahead which could cause some of the current market activity to ease.”

Rightmove said properties are taking an average of 60 days to secure a buyer, three days more than last year, which indicates buyers are not rushing their decisions.

Mr Bannister added: “Homeowners who are thinking of coming to market soon shouldn’t let the increased activity make them over-optimistic and must price competitively to sell. With affordability still very stretched for many, choosy buyers are taking their time to browse the increased number of homes for sale and find the perfect home at the right price.”

Jason Dainty, co-founder of estate agent Hopkins & Dainty in Derbyshire, commented: “We’re seeing more sellers coming to market, and overall we’re seeing some positive sentiment amongst both sellers and buyers.”

“Well-priced and attractive properties are still selling quickly, even getting interest on the first day of marketing. However, the price has to be right otherwise, they risk being ignored by prospective buyers.”

Rightmove’s report follows a recent lettings index from Hamptons, which revealed that the rent gap between the North and South of England is now at its narrowest since records began in 2013.

Average rents in the South of England saw tenants forking out a hefty £1,318 per month as of August, which is a staggering 37 percent more expensive than their northern counterparts, who were paying an average of £960.

Hamptons’ latest figures show that this disparity has declined from 43 percent in August 2023, down from a high of 55 percent in November 2021.

Aneisha Beveridge, Hamptons head of research, said: “Much like house prices, the rental North-South divide has been closing for the last five years. The narrowing reflects the cyclical nature of the housing market with house prices in the North of England rising 31 percent, nearly double the southern rate.

“These figures have been mirrored in the rental market, with rents in the North of England quickly playing catch up.”

Ms Beveridge pointed out the recent rapid change: “But it’s only been in the last year that the gap has really started to narrow beyond the point we’ve previously seen.”

She noted that this tightening trend has been propelled by slower rental growth across southern England due to heightened affordability pressures.

While renters in the South haven’t seen as much of a dramatic percentage increase, they’ve still faced significant jumps in actual cost, Ms Beveridge explained.

To put the numbers into perspective, Ms Beveridge said: “A 10 percent increase in South of England rents would cost tenants an extra £1,581 a year, £428 more than for a tenant in the North.

“Despite the pace of rental growth slowing, it’s remained resolutely in positive territory, triggered by landlords’ higher costs.”