UK property asking prices increase at quickest pace since 2016

London

ASKING prices for UK homes rose at the fastest annual rate in almost six years as the number of available properties dropped to a record low.

Online property portal Rightmove Plc said the price that sellers sought in January was 7.6 per cent higher than a year earlier at £341,019 (S$628,752), the strongest growth since May 2016. Compared with December, the average price rose 0.3 per cent.

Britain's housing market continues to boom despite the end of a temporary tax break last year and an interest-rate increase in December, propped up by a chronic shortage of properties on offer and mortgage costs near a record low.

"Prices are likely to continue to rise until more choice is available," Tim Bannister, Rightmove's director of property data, said in a statement released on Monday (Jan 17). "It's clear that the trends which defined the market in 2021 have carried over into this year."

There were signs that bottlenecks in the supply of new homes have begun to ease, however. The first working week of 2022 was "the busiest start of the year ever" for homeowners preparing to sell.

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The number of valuation requests was 44 per cent above January 2021 levels and 48 per cent above January 2020, before the pandemic struck. For now, strong demand is colliding with historically low supplies of properties on the market. There was a 15 per cent increase in enquiries from prospective buyers, and the number of homes on the books of each agent fell to an average of 12, a new record low.

A separate survey published on Saturday (Jan 15) by OnTheMarket, a rival property portal, found that optimism continues "unabated" with three quarters of buyers confident of making a purchase in the next three months. However, it warned that "over the coming months house price growth may start to tail off" as more properties come onto the market and buyers respond to rising mortgage rates. BLOOMBERG