Rightmove reports average new listings for estate agents show an upward trend compared to last year as sellers move to avoid the cost of Home Information Packs. Average asking prices have increased by only 0.4% in May (£871), the lowest monthly rise this year, while the annual rate of increase has dropped from 15% to 13.1%. These are signs that the rising interest rate environment may also be influencing sellers' pricing decisions.
This coincides with evidence of some correction of the shortage of supply that has been instrumental in driving prices to record highs this year. The impending deadline to avoid HIP costs now seems to be motivating an increasing number of sellers to come to the market before June 1st. Last month was the first time this year that new listings per branch exceeded the number in 2006, with the average stock per branch increasing from 59 to 61 this month. Over the last month Rightmove saw a record number of over 200,000 properties newly advertised on their website; the previous highest was June 2006 with 178,158 properties.
Miles Shipside comments, "Whilst we would expect any rush to be in the next two weeks, new instructions per estate agent in the last two weeks are 4% up on last year, a substantial turnaround to this year's average of 10% to 15% down. It is strange to see this in a rising interest rate environment, which would normally discourage more sellers. The added incentive for both them and their estate agents is to potentially save several hundred pounds by avoiding the cost of a HIP. This seems to be swelling the choice for buyers and shrinking the pace of price rises for sellers".
