It surges past threshold for the first time
The average property price in the UK has hit a new record high for the second consecutive month, breaking through the £350,000 barrier for the first time.
According to the latest Rightmove House Price Index released on Monday, the average price of property coming to market has jumped by 1.7% this month to £354,564.
Rightmove said that the average monthly increase is the largest seen at this time of year since March 2004, pushing the annual rate of increase to 10.4%, with all regions and counties, except London and Scotland, now up over 10% annually.
Tim Bannister, director of property data at Rightmove, said that there is a hat-trick of reasons for homeowners to follow the normal trend and make it their goal to sell this spring.
“Firstly, the potential to achieve a record price for their property,” he said. “Secondly, the imbalance between high buyer demand compared to low available property supply is the greatest that we have ever seen for the start of a spring market, meaning that the chance of being able to pick and choose between several suitable buyers is strong. Thirdly, the proportion of properties finding a buyer within the first week is also at an all-time high for this time of year, so sellers with an appropriately priced and well-presented property can expect a shorter marketing period than the norm.”
Read more: Rightmove: Property prices hit 20-year record.
The record price level is being stoked by the greatest imbalance between buyer demand and the number of properties available for sale that Rightmove has ever measured at this time of year. There are now more than twice as many buyers as sellers active in the market, the real estate company said.
Conor Murphy, chief executive at Smartr365, agreed that a combination of high-demand and low-availability, coupled with the looming presence of further increases in interest rates, has contributed towards a rapid increase in house prices in March.
“Spurred by the threat of costlier rates later in the year, prospective buyers are choosing to bite the bullet and complete home purchases, but in doing so continue to pay record prices due to the short supply of available properties,” Murphy said.
Kate Eales, head of regional agency at Strutt & Parker, said that despite reports of historically low stock volumes, incremental increases in the number of homes coming to the market are being observed.
“The increase in demand for larger homes is evident as buyers search for more space, including room for a home office. The trend of a significant number of people planning to work from home for three days a week or more in the longer term has created new hotspots across the country for part-time commuters,” Eales said.
Read more: Rightmove predicts house prices will rise by 5% in 2022.
Rightmove also found that the largest monthly price increase had been recorded in the “top of the ladder” sector, predominantly comprising of properties with four bedrooms or more. That had seen a 3.8% jump, or £23,619 increase, due to high demand and the greatest scarcity of supply.
However, it is the more mass-market “second-stepper” sector that’s selling fastest, with just over half (50.3%) of these homes finding a buyer within the first two weeks of marketing.
“All sectors of the market are experiencing very brisk conditions and we expect the strong market to continue until economic forces combine to move the supply and demand balance closer towards equilibrium,” Bannister said. “There are headwinds that seem likely to remove the current market froth in the second half of the year. We’ve just seen interest rates rise again, and there are further incremental increases forecast for the year which will raise mortgage rates for some.”
