More than 12 months on from the Brexit vote, strong buyer demand continues to fuel property sales despite recent reports of a downturn in the market, says new report.
Nearly half (45 per cent) of the properties listed for sale in the past month are already under offer, the highest proportion ever recorded since Rightmove started tracking this data seven years ago.
There are more houses being put up for sale compared to when the EU referendum was held this time last year. However, the ongoing lack of housing supply means demand from buyers continues to outpace the number of homes coming to market.
The data from Rightmove, which tracks asking prices rather than completed sales, also shows a seasonal stall in month-on-month price growth as we enter the summer holiday season.
Modest growth over the past 12 months sees average asking prices across England and Wales rise by 2.8 per cent to £316,421, which although is in line with market forecasts and expectations for this year, is far lower than the rises recorded a year ago.
In Greater London, the pace of growth shrinks to just below one percentage point, yet average asking prices have still been driven up by £7,000 in the past month to reach £641,338.
Miles Shipside, Rightmove director and housing market analyst says: "House price rises are muted despite high housing demand, indicating that we have left the stage of the cycle where price rises exceed the rate of inflation. High demand will continue to underpin prices, but we are seeing stretched affordability limiting the pace of rises, especially in the south of the country."
Property experts believe that buyers have hit their price ceiling as double-digit house price growth has far outpaced wages over the past five years. The gulf between average incomes and average property prices is now wider than ever.
Higher inflation and lower wage growth may mean the Bank of England holds off on raising interest rates while disposable incomes are squeezed, and there are signs that consumer credit is tightening.
“Today’s figures mirror the slowing of house price growth that we saw in the recent RICS survey, but activity in the mortgage market remains strong - and the property market outside of London and the South East continues to show healthy growth.
However, the ongoing lack of housing supply remains a fundamental issue,” says Jeremy Duncombe, Director, Legal & General Mortgage Club.