Record rise of house prices as demand exceeds supply

Asking prices have once again broken records, hitting £348,804 in February, rising by 2.3% (+£7,785), according to the property website Rightmove.

Albeit February normally sees a rise in asking prices from January, but this is the biggest monthly jump in cash terms recorded by the property portal. The report also indicates that the annual rate of asking price growth (+9.5%) is the highest recorded since September 2014. This new record means that average asking prices have now risen by nearly £40,000 in the two years since the pandemic started, compared to just over £9,000 in the previous two years.

The pandemic continues to influence many home moves, with this month’s price growth driven primarily by the “second stepper” sector – those who may find themselves in need of more space and are now ready to move on from their first homes.

As the final pandemic restrictions now look to be ending, and returning to the office is encouraged or required by many businesses, London has recorded the biggest jump in the number of buyers sending enquiries of any region (+24%), a new price record, hitting an average of £667,000, and its highest annual rate of price growth in the six years since the Brexit vote.

Biggest ever monthly price jump sets new record high; London also records biggest annual jump.

Tim Bannister, Rightmove’s Director of Property Data said: “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 re-consider their priorities and where they want to live.

“As the final legal restrictions look to be ending soon, and more businesses are encouraging a return to the office for at least part of the week... … A fear of missing out in the current competitive market is fuelling rising activity from both buyers and sellers.

In a market that is still very short of available stock, more potential buyers are sending enquiries to agents compared to this time last year to try to beat the crowd, with the result being that buyer demand is 16% higher than at this time in 2021. Bannister notes that “High demand and a shortage of available stock are supporting a rise in prices and a new record average asking price this month. Commenting that the rising cost of living is affecting many people’s finances, Rightmove indicated that despite rising costs and rising interest rates, the data was showing that demand is rising across the whole of Great Britain.

It can be highlighted that the Outer London boroughs except Hackney saw the highest price rises, with homes in Bromley seeing the biggest annual price increase in the capital at 11.5 per cent to £610,500, followed by Barking & Dagenham were prices rose up by 10.8 per cent to £362,000; Kensington & Chelsea with an increase of 10.6 per cent to £1.68 million, followed by prices in Havering rising by 9.9 per cent to £458,000 and in Merton by 9.7 per cent to £683,000.

It has been observed that High net worth international buyers, who prefer London’s millionaire playground, have returned to the London property market triggering a demand for large multi-million pound houses in the capital. Meanwhile property prices in East London have seen an impressive 568 percent price rise in the 20 years to 2018, leading many to believe property in the borough may have peaked.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. SSIL does not guarantee the accuracy, legality, completeness, reliability of the information and or for that of subsequent links and shall not be held responsible for any action taken based on the published information.