Average house price hits £300,000

Property prices went up once again last month to hit a new record high, while there was encouraging news for first-time buyers with an increase in the number of new properties coming on to the market.

According to the latest Rightmove house price index, the value of property coming to market increased by 2.9% to £299,287, beating the previous high set in October 2015 by over £2,700.

The biggest annual changes were in London and the East. Property prices in London went up 10.5% to £582,483 while the East saw a rise of 10.7% to £321,630. The smallest annual rise was in the North East, where house prices went up 0.9%.

Miles Shipside, Rightmove director and housing market analyst, said: “The new year’s market has hit the ground running in many locations, continuing last year’s momentum and resulting in the price of property coming to the market hitting a new high.

“However, in spite of the apparent veneer of market buoyancy, those thinking of putting their property up for sale need to avoid being too optimistic with their initial asking price, as most buyers are still understandably being very selective about their future home.”

The national average asking price for first-time buyer properties was £183,635, up 9.9% from the same time a year ago.

The imbalance between supply and demand is putting increasing pressure on house prices and has led to many first-time buyers being squeezed out of the property market.

The government has introduced a number of new schemes in recent years to help those looking to buy a home, including Help to Buy and Right to Buy. In the Autumn Statement last year, Chancellor George Osborne unveiled plans to build 400,000 homes and announced a 3% rise in stamp duty as part of the government’s aim to curb the buy-to-let sector.

Rightmove said there were welcome signs of fresh supply increasing with the volume of new properties coming to the market up 5%, the highest since the credit crunch of 2008.

However, this uplift is patchy, with only four regions above the 5% year-on-year average increase, namely London, South East, South West and Yorkshire and the Humber. New stock is actually down by 0.3% in the West Midlands and Wales and the North West have seen an uplift of 1% or less, restricting fresh choice for buyers in these regions.

Shipside said that if this trend continues the increased competition among new sellers may help to temper price rises.

“There is a 10% uplift in new supply compared to the same period in 2015, meaning all regions have more fresh choice in this sector than at this time last year.

“More and more agents are reporting a healthy return in first-time buyer numbers, and with the cards increasingly stacked in their favour, 2016 could prove to be the year of the first-time buyer.”