House prices rise at fastest monthly rate for more than 20 years

The average asking house price increased by nearly £8,000 month-on-month in February, the highest increase for at least 20 years, according to Rightmove’s house price index

New seller asking prices reached £348,804 in February, an increase of 2.3% on the figure for January. The monthly increase of £7,785 is in cash terms higher than any recorded by Rightmove since it launched its index 20 years ago.

The figure is also 9.5% higher than in January 2021, marking the biggest year-on-year rise since September 2014. The figures mean prices have now risen £40,000 in two years, compared to slightly more than £9,000 in preceding two years.

The figures suggest a widely expected slowdown in the housing market this year has not yet materialised.

Buyer demand, as measured by the number of new buyer enquiries submitted, is 16% up year-on-year. Rightmove said there was an 11% increase in homes listed for sale, which it said was an early sign of “a better-balanced market” although the ”mismatch between buyer demand and the supply of available homes” as noted by the Royal Institution of Charterted Surveyors and others, remains.

London recorded its biggest increase in prices-year-on-year since 2016 with a rise of 7.3%. It also had the highest percentage increase in number of buyer inquiries of any region with 24%. Rightmove said this was driven in part by a return to office working as covid-19 restrictions came to an end.

See also>> Surveyors predict sales slowdown by February

Tim Bannister, director of property data at Rightmove, said: “The data suggests that people are by no means done with their pandemic-driven moves. Such a significant societal event means that even two years on from the start of the pandemic, people are continuing to re-consider their priorities and where they want to live. As the final legal restrictions look to be ending soon, and more businesses are encouraging a return to the office for at least part of the week, we now have a group of movers who are looking to return closer to major cities, or at least within comfortable commuting distance of their workplaces.”