Published: 23/03/2022 By Alexander ParishThe significant increase in house prices over the past 2 years still shows no signs of slowing down. The average price of a property coming onto the market has now increased by 1.7% (or the equivalent of £5,760) this month to a staggering £354,564 having now broken through the £350k barrier!
This monthly rise is the biggest increased rise seen in the current quarter since march 2004 (in comparison for the same periods in previous years). The annual rate of increase is now at 10.4% according to Rightmove.
The market still remains a sellers market, given the high demand for properties and relative slow supply of new properties coming onto the market. Rightmove have further advised the spring market will see the widest supply-demand imbalance for this time of year with almost twice as many buyers as sellers.
However, rightmove have forecast a less active market coming out of the summer months, with the economic impacts of the devastating war in Ukraine.
Tim Bannister, Rightmove’s director of property data, said: “There’s a hat-trick of reasons for home-owners 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.
“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. Those who weren’t ready to take advantage of last year’s rush now have another chance to get on the market while these conditions last.
“Many of those who are selling in this record-breaking market obviously also face the prospect of buying again in the same market, and being in fierce competition against other buyers. Having a buyer for your own property, subject to contract, puts those who are buying again in a powerful position compared to buyers who have yet to sell, and agents report that these ‘power buyers’ are more likely to get the property that they want and negotiate the best deal on price.”
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, according to Bannister.
He added: “ 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. Inflation and cost of living increases are also likely to affect buyer affordability and market sentiment.
“It’s too early to know how the UK housing market will be affected by the longer term economic impact of the abhorrent and devastating war in Ukraine, and so all we can use as a measure for now is the level of UK buyer and seller activity.
“When the war started we initially saw slightly lower buyer demand but this has now stabilised. Our forecast is that overall transaction numbers for 2022 will revert back to pre-pandemic levels, as the market returns to a more even balance. Currently, the number of sales being agreed by estate agents is 11% higher compared to the same period in the more normal market in 2019.”