UK house prices have experienced a significant surge, with the average price of a home rising by £5,279 to almost £370,000 due to increased buyer interest and a surge in house sales this March. This 1.5% jump in prices is the largest in ten months, exceeding the usual 1% rise seen in March historically. Rightmove, the leading property website in the UK, attributes this growth to a spike in buyer demand as more individuals are eager to purchase homes.
The average asking price is now set at £368,118, still slightly below the peak seen in May 2023, but showing signs of recovery from what was a subdued market last year. Halifax recently reported that the current average house price is almost at the June 2022 peak.
Tim Bannister from Rightmove noted a 13% year-over-year increase in sales since March began, with larger homes largely fuelling the rise in prices. He pointed out that it now takes 71 days on average to find a buyer, the longest since 2019. Desirable properties are being snapped up quickly, while overpriced homes linger on the market, prolonging the average selling time.
London is witnessing a particularly strong demand for houses, with various factors such as returning to office work, wage increases, stable housing prices, and reduced inflation contributing to the appeal of living in the capital.
However, the mortgage market remains challenging with fluctuating rates adding to buyer affordability issues. The average five-year mortgage rate has seen a rise from 4.64% to 4.84% over five weeks, reflecting the volatile nature of the market, with rates shifting in response to the latest economic indicators.
Despite a positive start to the year, Bannister advises caution due to last year’s swift market changes. He suggests sellers remain confident but realistic about pricing and open to negotiation, considering the ongoing pressures of higher mortgage rates on buyer affordability.
