Why do house prices keep rising?
January was the busiest-ever start to a new year for the housing market, and this month has been even busier, with a huge number of people determined to move as we head into spring.
We normally see a rise in asking prices from January to February, but this month we’ve seen the biggest jump in more than 20 years. The average price of homes coming to market in Britain has risen by £7,785, hitting a record high of £348,804.
This new record means that average asking prices have risen by nearly £40,000 in the two years since the pandemic began, compared to just over £9,000 in the previous two years.
London has seen the highest annual rate of price growth since 2016, as Covid restrictions come to an end and people return to working in the city. The average asking price of a home in the capital has now reached £667,001.
You can check asking prices where you live by viewing this month’s House Price Report here.
What’s behind the price growth?
Many people are still reconsidering their priorities and where they want to live after years of Covid restrictions. This month’s price growth is mainly driven by sellers who are ready to move on from their first homes in search of more space.
Buyer demand remains high, but there’s still a shortage of available properties, so it’s a competitive market. Many home-movers are rushing to put their properties on the market to make sure they can move quickly, giving them the best chance of securing their next home.
“A fear of missing out on one’s dream home is really driving market behaviour at the moment, as movers look to do all that they can to avoid the disappointment of being too slow to secure their ideal property,” said our property expert Tim Bannister.
“Setting up instant property alerts, keeping a keen eye on new listings coming to market each day, and acting immediately, rather than waiting, are other tactics that some successful buyers are using,” he added.
READ MORE: How to become a power-buyer in 2022
Will prices keep rising?
The good news is we are starting to see the first signs of the pressure easing. There are more new property listings coming to the market compared to a year ago, giving buyers some fresh choice.
This should help to ease the pace of price growth as we head out of a busy spring season and into a more traditional summer housing market.
What does this mean if I’m looking to move home?
Our research shows that March is the month home-movers spring into action, and best time of the year to put your property on the market.
This means that competition between buyers is generally at its strongest in March, providing an opportunity for would-be sellers to have the best chance of selling their home quickly for a good price.
“The data shows us that the level of demand in March means sellers are likely to met with multiple potential buyers competing for their home,” says Tim Bannister.
READ MORE: Why March is the best time to sell