The first half of 2021 has been the busiest year on record for the housing market, it has been revealed. The frenzied market activity has helped to push up the average asking price of a newly-listed property to a new record for the fourth consecutive month, according to Rightmove.
The average asking price has climbed £21,389 higher in just six months to £338,447, according to the property listing website's index.
Rightmove's Tim Bannister said: “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.”
“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 a home needs to provide.”
Rightmove said that in the month to mid-July, asking prices rose 0.7 per cent - the equivalent of £2,374 and the largest monthly rise at this time of year since July 2007, at the peak of the boom just before the financial crisis.
The price data is based on Rightmove's asking prices, while the data on the number of sales is a prediction of what the next HMRC transactions will show, based on Rightmove data that looks at properties being marked 'under offer' or 'sold subject to contract'.
Rightmove attributed the increase to a lack of supply of homes for sale and identified a shortfall of 225,000 homes for sale which, if available, would have helped to maintain a more normal level of property stock for sale and stabilise prices.
The high levels of activity have continued, according to Rightmove, despite the end of the stamp duty holiday. This measure, which ended on 30 June, saw no tax on the first £500,000 of a property purchase price replaced by none on the first £250,000 until the end of September. Stamp duty is due to return in full after that.
Rightmove said there is an 'urgent need' for low stocks of property for sale to be rebuilt so that stability in prices can return.
Tim Bannister added: “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.”
“This has left prospective purchasers with the lowest choice of homes for sale that we've ever recorded, continuing price rises, and stretched affordability.”
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.
Analysis shows that the shortfall of 225,000 homes for sale comes from 140,000 more sales being agreed and 85,000 fewer new listings than the long-term - between 2014 and 2019 - average for the first half of a year.
The net result of this major imbalance between supply and demand is that the average number of available properties for sale per estate agency branch is at a new record low of 16 properties. It compares with the previous low before 2021 of 25 properties and a longer-term average for this time of year of 31.
This is based on Rightmove data for the number of available properties on average per agent on the site.