House prices have climbed by more than a fifth in the past five years, boosted by unprecedented buyer demand and increased household savings after the pandemic.
Asking prices rose by more than 8pc in the year to February, according to property website Zoopla, and have jumped by 21.5pc since 2017.
House price growth has been propped up by a chronic shortage of homes for sale in the past two years, with the average property in the UK now priced at £245,200.
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Homeowners have enjoyed huge price growth and unprecedented competition amongst buyers since the property market reopened after the first lockdown in the summer of 2020.
Homes which list for sale have been snapped up by desperate buyers within weeks. Almost a third more sales were agreed in the first three months of 2022 compared to pre-pandemic levels, according to Zoopla.
The company reported buyer appetite remained “unseasonably strong”, despite predictions the market would begin to cool this year.
Gráinne Gilmore, of Zoopla, said: “Demand is strongest for family houses and more than twice as high as usual for this time of the year.
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“But demand is up across nearly all property types, indicating that those thinking of moving are in pole position to sell.”
Buyers have rushed to purchase whilst they can still access historically cheap mortgage deals and before interest rates rise further. The Bank of England earlier this month made its third consecutive increase to the Bank Rate, to 0.75pc, and further rises are expected.
Despite soaring buyer demand, the supply of homes for sale in February was still 42pc lower than the five-year average. Zoopla predicted supply would build in the coming months, but warned it would not reverse the extreme demand imbalance this year.
Ms Gilmore added: “The increased economic headwinds, including the rising costs of living and increasing mortgage rates, property price growth will start to moderate as we move through the second half of 2022.”
By Rachel Mortimer
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