Once again, the average asking price for a home in the UK has leapt to an all-time high, having achieved a further 1.6% growth in a single month. According to the latest figures from the Rightmove House Price Index, average property prices in the UK hit £360,101 in April, a significant increase of £5,537 compared to March.
Over the last three months, average asking prices for UK homes have skyrocketed by more than £19,000. This is the highest three-month climb in the history of the Rightmove House Price Index, indicating that the escalating economic crisis is having no impact whatsoever on UK house prices.
Remarkably, the housing market’s performance during the first four months of 2022 has been even more explosive than at any point during the government’s temporary stamp duty holiday. According to Tim Bannister, director of property data at Rightmove, the market’s record-breaking performance continues to be a product of the growing gap between demand for affordable properties and available inventory.
“While growing affordability constraints mean that this momentum is not sustainable for the longer term, the high demand from many buyers chasing too few properties for sale has led to a spring price frenzy, a hat-trick of record price months, and the largest price increase for three months Rightmove has ever recorded,” he said.
No sudden slowdown on the horizon
Mr Bannister went on to say that while an eventual slowdown may be inevitable, it will almost certainly be gradual, far from a ‘burst bubble’ as some had predicted.
Elsewhere, Geoff Garrett, director of Henry Dannell, stated that home sellers and buyers alike should be braced for turbulent times ahead.
“While we don’t expect to see market activity evaporate completely, the growing cost of living will be a significant factor in the months to come, and as household finances are stretched, prospective buyers will likely ease off on the sums they’re willing to offer,” he said.
“As a result, sellers will need to realign themselves with these changing market conditions, and this will cause the rate of house price growth to cool.”
Data published by Rightmove indicated that more than 50% of all homes being sold in the UK are selling for their full asking price or higher. This is, again, a record high for the company’s House Price Index.
The average time it takes for a seller to find a buyer for their home is currently just 33 days—less than half the time it took to sell a home on average in 2019 when the average was 67 days.
“Over 125,000 new sellers have taken advantage of the great sellers’ market this month, but more are needed in all areas and in all property sectors to meet high buyer demand,” added Bannister.
Meanwhile, Christina Melling, chief executive at digital professional service provider Stipendium, highlighted the extent to which skyrocketing property prices are making it even more difficult for newcomers to find their way on the UK’s increasingly elusive property ladder.
“Unfortunately, it’s the nation’s first-time buyers who are paying the price, and those looking to take that first step are now paying £2,000 more for the pleasure compared to just one month ago,” she said.
“It’s yet another brick in an already substantial financial wall that’s blocking many from realising their dreams of homeownership.”