House prices hit yet another record high in April despite continuing economic pressures, the latest Rightmove House Price Index has revealed.
Prices hit a high of £360,101 in April, up 1.6% from the £354,564 recorded in March as prices increased for the third straight month.
On an annual basis, the index was up 9.9% in April, down slightly on the 10% registered in March.
The property portal added that high buyer demand for limited stock for sale suggests that while price growth may slow down, sustained price falls are unlikely.
Righmove’s Tim Bannister said: “While growing affordability constraints mean that this momentum is not sustainable for the longer term, the high demand from a large number of buyers chasing too few properties for sale has led to a spring price frenzy, a hat-trick of record price months, and the largest price increase for a three-month period Rightmove has ever recorded.
“The strong momentum has carried over from last year and, combined with the impetus of the spring moving season, has delivered the quickest selling market we’ve ever seen.
“The high speed of the market and competition among buyers when making an onward move will be deterring some owners from putting their homes up for sale.
“However, if you can secure both a quick sale and a quick purchase then it’s a lot less stressful than the uncertainties of a slower market when finding a buyer for your own home can drag on for months or not happen at all.
“Over 125,000 new sellers have taken advantage of the great sellers’ market this month, but more are needed in all areas and in all property sectors to meet high buyer demand.”
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Tomer Aboody, director of property lender MT Finance:
“Three months of price growth in the midst of rising inflation and interest rates, as well as the ongoing economic uncertainty, further highlights the lack of properties coming onto the market. This is creating huge competition among buyers, which is driving prices ever higher.
“While the chance of further interest rate rises is extremely high, buyers are taking advantage of low rates and fixing for as long as possible in order to manage their mortgage payments over the next few years.
“A change in stamp duty is needed so that more sellers look to sell, increasing supply and stabilising house prices.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“At first glance, Rightmove’s figures are quite surprising, particularly as they don’t reflect what we’ve been seeing over the past few weeks at ‘the sharp end’.
“Firstly, these are asking, not selling, prices so don’t allow for increasing worries about the tightening squeeze on the cost of living and rising interest rates exacerbated by the war in Ukraine
“We’re also finding the continuing dire shortage of stock is driving demand from new buyers, persuading many existing movers to continue with their purchases as they know how difficult it will be to find an alternative property at a more realistic price.
“As a result, values are likely to keep rising albeit more slowly partly because the number and pace of transactions is dropping and some demand is fizzling out as it can’t be satisfied quickly enough.”
Peter Beaumont, CEO of The Mortgage Lender:
“Despite concerns, the housing market continues to grow off the back of strong buyer demand and limited supply. With the average price tag reaching £350,000, it’s clear that buyers’ appetites continue. With expectations that interest rates are expected to move again over the next year, this will likely also be motivating prospective buyers to act now.
“However, as the cost of living continues to hit the pockets of consumers, we could see demand start to tail off as people contend with higher bills and food costs. For those still able to buy, move house or remortgage, securing the most favourable rates will be the priority.
“Lenders too are beginning to change their affordability models to take into account the impact of rising costs.
“This will likely mean limits to what lenders are prepared to lend. While it is vital that lenders are paying close attention to affordability, it’s equally important that lenders take into account real-life circumstances. This means that when more complex cases cross the desk that the decision isn’t an automatic no without further consideration.”
Emma Cox, director of real estate at Shawbrook:
“House prices have continued to defy gravity largely due to demand far outweighing supply. Despite the prices and the rising cost of living outpacing inflation, buyers have remained surprisingly determined in the face of a challenging market and have taken to acting quickly to guarantee their purchase. Though, further increases in price – as well as living costs – could see activity stabilise and an element of price correction in the year ahead.
“The combination of a significant house building push as well as a greater focus on quality, affordability and energy efficiency will help to restore a sense of balance to the market and alleviate some current pressures. Government mandates in the form of schemes such as the Levelling Up agenda will remain a vital piece of the puzzle.
“Good news remains for investors with existing portfolios and those looking to sell, as the market is beginning to react with new mortgage products and other incentives such as flexible rates and favourable LTVs entering the fold. All of which are needed to support buyers and bring prices back in line with inflation and wage growth.”
