The average asking price for a home coming to market in London is now £682,375, according to Rightmove’s latest house price index.
Asking prices jumped by £4,591 in a month, up 0.7 per cent since September and 1.4 per cent annually.
Across Britain, the typical price being asked for a home coming onto the market increased by 0.8 per cent or £2,974 to reach £370,759. The average price tag on a home jumped by nearly £3,000 in September, according to a property website.
September usually sees a month-on-month price jump, but this year’s increase of is double the long-term average, Rightmove said.
Asking prices rose 2.1 per cent in a month in Tower Hamlets, where the average asking price is now £619,605. Kensington and Chelsea and Camden both saw asking prices drop 2.3 per cent since August, as prime central London postcodes continue to see steep price discounts.
Several factors are thought to be giving the autumn housing market a boost. Mortgage rates have been edging downwards, property choice for buyers has grown, and earnings are now rising faster than both inflation and house price growth, the report said.
There are still uncertainties ahead, including the timing of another Bank of England base rate cut following the recent 0.25 per cent decrease, and the announcements to be made in the October Budget, Rightmove added.
“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,” said Tim Bannister, Rightmove’s director of property science.
“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 the average property is still taking 60 days to find a buyer, which is three days longer than at this time last year, suggesting that the market is still “cautious and price-sensitive”.
“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,” Bannister added.
“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, said: “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.”
The report was released as a lettings index from Hamptons found that the gap between rents in the North and South of England has closed to its smallest level since its records started in 2013.
In August, the average new tenancy in the South of England cost £1,318 per month, 37 per cent more than in the North of England where rents averaged £960 per month.
This gap has narrowed from 43 per cent in August 2023 is down from a peak of 55 per cent in November 2021, Hamptons said.
Aneisha Beveridge, head of research at Hamptons, 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 per cent, nearly double the southern rate,” Beveridge explained.
“While tenants in the South have seen weaker growth in percentage terms, in cash terms, they’ve faced big rises. A 10 per cent 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.”
Landlords are increasingly selling up in London ahead of a potential rise in capital gains tax (CGT)and a new renters’ rights bill.
“Hiking CGT is an anti-landlord tax and we have already seen a sell off in anticipation of the increase,” said Purplebricks CEO Sam Mitchell, warning that dwindling supply could push rents even higher.
“We would urge the Government to instead focus its efforts on more progressive incentives such as CGT breaks for landlords if they sell their properties to tenants or first-time buyers.”
