The average asking price of houses has risen by nearly £8,000 this month, the biggest jump in more than 20 years.
According to the property portal Rightmove the average price of a house coming to market is £348,804, about 9.5 per cent higher than a year ago.
In the two years since the pandemic started, asking prices have risen by nearly £40,000, compared with £9,000 in the previous two years.
James Forrester, managing director of estate agent Barrows and Forrester, said: “We continue to see high numbers [of buyers] fighting it out for a very limited level of stock, the result of which is an inevitable boost to property values. However, we’re also seeing sellers pre-empt this high demand and enter the market at a far higher price point to take advantage of this buyer desperation.”
Tim Bannister, a director at Rightmove, added: “The data suggests that people are by no means done with their pandemic-driven moves. Such a significant societal event means that even two years on from the start of the pandemic, people are continuing to reconsider their priorities and where they want to live. High demand and a shortage of available stock are supporting a rise in prices and a new record average asking price this month.”
The property portal reports an 11 per cent increase in the number of people registering to sell their homes in January compared with the same time last year. However, there has also been a 16 per cent rise in the number of people looking to buy, suggesting the current imbalance between supply and demand is set to continue. Every estate agency has 40 properties on its books, including those under offer, according to Rightmove.
However, as the last of the Covid restrictions are lifted and more companies recall staff to the office, London has recorded a 24 per cent jump in buyer inquiries — the largest annual increase in the UK. It also recorded its highest annual rate of asking price growth since 2016 at 7.3 per cent. The average asking price in the capital is now £667,001.
There are signs that in some areas the heat may be coming out of the market. In Wales asking prices have risen 13.2 per cent over the past year but in the past month are up by just 0.4 per cent to £238,304. In the East Midlands prices rose by 13.3 per cent over the year but were up by just 0.4 per cent in the past month to £267,846.
Asking prices are almost always higher than sold prices: Hamptons estate agency has reported that the average seller in England and Wales sold their home for 99.7 per cent of asking price in 2021. Last week the Office for National Statistics reported that the average sold price across the UK was £274,712 in December, 10.8 per cent higher than the previous December.
Rightmove reported that on average it takes 44 days to sell a house in the UK. The quickest place to sell is Scotland where it takes just 34 days, followed by 38 days in the southwest. The slowest are London, with an average of 68 days, and Wales, where it takes 46 days, according to Rightmove.
“The rising cost of living is undoubtedly affecting many people’s finances, especially those trying to save up enough for a deposit to get on the ladder or to trade up,” said Bannister. “However, despite rising costs and rising interest rates, the data right now shows demand rising across the whole of Great Britain, with many people determined to move as we head into the spring home-moving season.”
Barry Chuwen, of MQ estate agents in Scotland, added: “Some people believe things will inevitably slow down in the spring, but for the moment, demand remains strong and this is forcing prices up and up.”
However economists predict that the housing market is likely to slow down later this year as inflation, interest rate rises and cost of living rises kick in.
In anticipation of several interest rate rises by the Bank of England this year the Centre for Economics and Business Research recently downgraded its house price forecasts from 3.6 per cent to 3.3 per cent this year, and from a fall of 0.4 per cent to a fall of 0.7 per cent in 2023.
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House prices jump by £8,000 in a month, the fastest for 20 years