We saw the busiest-ever start to a new year for the housing market in 2022, and there’s no sign of it slowing down as we head into the busy spring home-selling season.
This is now the second consecutive month we’ve seen asking prices hit a new record high, which has taken the national average higher than £350,000 for the first time.
Asking prices jumped by £5,760 in March, to reach £354,564, which is the largest increase at this time of year since March 2004.
Why do asking prices keep rising?
Prices keep rising because buyer demand is so strong. In fact, the gap between the number of home-buyers looking to move, and the amount of properties available, is the biggest we’ve ever measured at this time of year.
So, if you’re looking to move, this is the best-ever spring to put your home on the market.
Which types of homes are seeing the biggest price growth?
Homes with four-bedrooms or more have seen the biggest price growth in March, with a jump of 3.8% (+£23,619). This is because they are the most sought-after homes for buyers, and the hardest to find right now as so few are currently on the market.
The good news for those looking to buy one of these larger homes is that we’re finally starting to see more choice coming through. There’s been a 12% increase in the number of these ‘top of the ladder’ homes coming to market in the last month, compared to the same period a year ago.
However, it’s homes within the “second-stepper” sector that are selling the fastest. This includes all three-bedroom and four-bedroom homes, apart from four-bedroom detached houses. Just over half of these homes are finding a buyer within the first two weeks of being listed for sale.
Are asking prices rising in every region?
The average cost of a home has increased in every region of Britain this month, apart from in London, where prices dipped by 0.4%.
Looking longer-term, average asking prices have risen in every region, by an average of 10.4% over the past year. This is the highest rate of growth we’ve recorded in any month since June 2014.
To check house prices in your region, take a look at our full House Price Index here.
Will prices keep rising?
Our property expert Tim Bannister says we can expect the strong market to continue until there’s more of a balance between buyer demand and the supply of homes.
There are more new property listings coming to the market compared to a year ago, giving buyers some fresh choice. This should start to slow down the pace of the price growth as we head out of a busy spring season and into a more traditional summer housing market.
“All sectors of the market are experiencing very brisk conditions. There are economic factors that seem likely to ease the pressure on the market 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,” he said.
Inflation and cost of living increases are also likely to affect affordability and some people’s plans to move.
“Our forecast is that the overall number of home sales in 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,” he added.