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House prices show largest annual increase since 2016

Written by: Anna Sagar
Average house prices at the start of the year have increased by 7.6% year-on-year to £341,019, which is the largest annual change since 2016.

According to Rightmove’s January house price index, the average price of property coming to market leapt by 0.3% this month, up £852 to £341,019.

The increase was fuelled by growth at the top end of the market, which includes properties with five-beds or more, four-bed detached houses and first-time buyers. The national average asking price for properties for “top of the ladder” properties was pegged at £623,936, up nearly 11% year-on-year.

Similarly, for first-time buyers the national average asking price was estimated at £214,176, up nearly seven% compared to the same period last year and a new record high.

The report continued that the number of homes coming to market was at a record low of 12 properties, down from 14 in December.

This along with high demand means market activity has remained strong, with average time to find a buyer in December was two weeks faster than the same period the year before.

It said 70% of properties currently on estate agents’ books have already been sold, so less than 30% of properties are available to purchase.

Driving onwards

It noted that there were signs that more properties could be coming to market, with the number of requests for estate agents to value property up 44% in the first week of 2022 compared to the same period in 2021, and up 48% against 2020.

Rightmove said that the first working week was the busiest ever opening to the year for home valuation requests and 4 January had the fifth-highest number of valuation requests in a single day.

The report continued that competition would remain strong in 2022, with 15% more enquiries from potential buyers to estate agents.

Tim Bannister, Rightmove’s property data director, said trends from 2021 had carried over into 2022 but there were “early signs of a better-balanced market” this year.

He pointed to the number of valuation requests as a sign of incoming supply but said that it may “take a little while to appear on the market”, but said it was still an “encouraging sign of more choice”.

He added: “The speed at which we’ve seen the fresh choice that has come to market being snapped up by eager buyers over the past 18 months is a reminder to buyers to move fast and book a viewing with the estate agent as soon as a property that could be the one for you comes to market.”

Bannister said that almost 40% of people enquiring about a home who have property to sell are yet to put it on the market, and as they were competing against those who could move faster, they could miss out on the home they want.

He said buyers with property to sell should make sure their current home is on the market or sold subject to contract before starting to search for a new home.

Bannister added that average house prices were only one% of the record from October last year and first-time buyers had reached a new record high.

He said: “All of the signs suggest that prices are likely to continue to rise until more choice is available.”

He added that the East Midlands, South West and South East were in “urgent need of new supply” as annual house price growth in those areas was above 10%, which was “unsustainable”.

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