The increase was largely driven by a 1.2 per cent rise in asking prices for four and five bedroom detached homes at the top end of the market.
In spite of the rising cost of mortgages, the average asking of a UK home jumped by almost £3,000 this month. The typical asking price increased by £2,906 to £365,357 in the year to mid-March, according to the latest Rightmove data.
The increase was largely driven by a 1.2 per cent (£7,947) rise in asking prices for four and five bedroom detached homes at the top end of the market.
This is despite many predicting house prices would fall by as much as 10 per cent this year.
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Instead, average asking prices climbed 0.8 per cent over the past month, with Rightmove saying buyer demand was 6 per cent higher than the same period in 2019.
It added first-time buyer and second-stepper homes rose by a modest 0.4 per cent and 0.5 per cent, respectively.
However, the average asking price is still £5,800 below October’s peak, according to the property platform.
Bigger homes are taking longer to sell, the report revealed, possibly driven by the fact that fewer people are making coronavirus pandemic-driven lifestyle changes.
This may be a result of fewer pandemic-driven moves to bigger homes and a more cautious approach to trading up, thanks to the ongoing cost of living crisis.
March traditionally signals the beginning of the busiest time of year for property sales but this month’s price hikes falls short of the average monthly rise of 1 per cent seen in March over the last 20 years.
Nicholas Mendes of mortgage brokers John Charcol said he was not surprised by the price increase but struck a note of caution.
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“There’s still a lot of demand out there – the biggest constraint at the moment is there’s not enough property on the market. From spring onwards things start to take off again and confidence is beginning to return, but many sellers are still hesitant. Mortgage rates are coming back down – there are some 4 per cent mortgage deals coming through next week,” he said.
“It’s a small positive but I don’t think we’re going to see an upward price trend throughout the year, it’s going to be more of a rollercoaster with property prices.
“You’ve got to remember the Rightmove data is based on asking prices, not selling prices. I think we’re likely to see prices dip by 8 to 10 per cent in the summer. The US banking sector is not as stable as expected and that filters through to the UK market.”
His caution was echoed by Sarah Coles, head of personal finance at Hargreaves Lansdown.
She said: “Sellers are taking a punt on higher asking prices. They’re hoping falling mortgage rates and the spring selling season will support some fairly optimistic pricing – particularly at the pricier end of the market. Unfortunately, there are a few signs that some of this confidence may be misplaced, and that they may well need to do a deal to secure a sale.”
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“Asking prices remain pretty punchy, up 3 per cent in a year. This has been driven by asking prices for larger properties – which are up 1.2 per cent in a month. However, this end of the market isn’t shifting as fast as it did in the same period in 2019, or as fast as slightly smaller homes. It’s a reasonable indication that they may not quite achieve these prices. This is even more likely when you consider Zoopla’s findings that home sellers are cutting prices by an average of £14,100 – or 4.5 per cent to shift their properties,” she added.
Tim Bannister of Rightmove said the data signalled the return of stability and confidence to the market.
“The pace of the market reached an unsustainable level in the last two years, and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-Budget.
“While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring buying season.”
By Eve McGowan
Source: i News