House Prices Increase By Almost £2,500 This Month As Buyer Demand Reaches ‘Record Levels’

The average asking price of homes coming to the market increased by £2,484 as buyer demand reached record levels, according to Rightmove’s latest House Price Index.

With more people spending extended periods at home during lockdown, many buyers were reassessing their housing needs and looking to upgrade. The Government’s extension of the stamp duty holiday also helped encourage further market activity.

The latest index suggested that the number of potential buyers enquiring about each available property had reached a record high, with demand sitting 34% higher than during the same period the previous year.

Rightmove also recorded an average of 7M daily visits to its website during February, 40% higher than in February 2020.

The extension of the stamp duty holiday helped ease concerns surrounding a potential market cliff-edge, while the strong level of buyer demand generated during lockdown continued to support market activity.

Demand was also expected to receive further support from the Government’s plans to encourage the return of 5% deposit mortgages, providing more options for buyers with smaller deposits.

Competition for available homes remained particularly high, making preparation increasingly important for prospective buyers. With a large number of buyers competing for a relatively limited supply of stock, those in a strong and proceedable position were likely to have an advantage.

Securing an understanding of borrowing capacity before beginning a property search was particularly important, as some lenders had tightened eligibility criteria in response to the continued economic uncertainty surrounding the pandemic.

Obtaining a mortgage in principle and understanding both the amount available to borrow and the level of borrowing that is affordable could help buyers establish a realistic purchasing position before making an offer.

Despite the strength of the market, mortgage availability and lending criteria continued to vary, making early financial preparation an important part of the homebuying process.

Express