Britain's housing market sees biggest price surge in almost one year

UK Home Prices Surge: Asking prices for homes in the UK have surged by the most in almost a year, according to a recent survey, reflecting the growing confidence of sellers amidst a rebounding housing market. 

Over the four weeks leading up to March 9, residential property prices saw a robust increase of 1.5 per cent, marking the strongest growth in a ten-month period. Despite this upswing, prices remain approximately £5,000 ($6,400) below their peak in May 2023. Comparatively, prices are 0.8 per cent higher than they were a year ago.

Seller optimism dampened

Tim Bannister, the director of property science at Rightmove, stressed that while sellers are increasingly optimistic, challenges persist due to stretched buyer affordability and rising mortgage rates. Nevertheless, buyer demand, as measured by Rightmove between February 11 and March 9, has risen by 8 per cent year-on-year (YoY), accompanied by a 13 per cent increase in sales.

However, caution among buyers is evident, with sellers taking an average of 71 days to secure a buyer – the longest timeframe for this period since 2019.

London home demand

In London, demand is particularly robust, attributed to people returning to offices and boosted by higher wage growth and lower inflation. This surge in demand follows a period of slowdown in the UK's property sector. Initially, interest rates on mortgages fell due to expectations of rate cuts by the Bank of England, but recent developments suggest that rates may not be reduced until later in the year. Rightmove highlights that the interest rate on a typical five-year fixed-rate mortgage has increased over the past five weeks, rising from 4.54 per cent to 4.84 per cent.