The ‘frenzy’ of asking prices

25 Apr 2022

The asking prices for UK properties soared once again in April but the pace of the sector should slow as consumers are increasingly worried by the growing cost of living crisis, a new report shows. Rightmove says asking prices jumped by 1.6% this month, slowing slightly from a 1.7% rise in March. More than half of houses are currently selling at or above the asking price, the report reveals. The survey echoes other metrics that show the UK’s housing market retained much of its momentum in the first half of 2022, despite the ending of temporary tax breaks on home purchases in the second half of 2021. However, with households feeling the pinch due to high inflation and tax rises, Rightmove had doubts about whether the housing market can keep up its recent strength - even though there is barely any sign of a slowdown at the moment. Tim Bannister, Rightmove's director of property data, said: “With three new monthly price records in a row, 2022 has started with price rise momentum even greater than during the stamp duty holiday-fuelled market of last year. 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.” He added: “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.”

UK cost of living crisis

Nearly 90% of UK households have reported a surge in their cost of living last month. The Office for National Statistics said a quarter of all those in its survey were struggling to pay their bills and 17% had turned to loans or borrowing on credit cards to make ends meet. Debt charities and anti-poverty campaigners said the figures, which cover the last two weeks of March, were a shocking reminder that this year households face the most dramatic cut to their living standards since the 1950s. The ONS numbers were taken even before households had the impact of April’s cost of living rises, when the cap on household energy bills went up by 54%.