Asking prices in London have hit an average of £689,000 following a rise of 7.6 per cent on the same month last year, according to the latest data.
Activity levels in the market are still significantly higher than before the pandemic, while the number of homes being listed for sale is much lower – down 55 per cent on 2019 – pushing prices up throughout the country.
Despite some signs the frenetic property market is starting to slow, sales agreed are up 12 per cent compared to pre-pandemic, although they’ve fallen 17 per cent compared to 2021 when the stamp duty holiday was nearing its end.
The average asking price nationally is now a record high £367,500, a 10.2 per cent increase on a year ago, while homes are taking just 31 days to sell, a record low average.
Rightmove’s Tim Bannister said: “As interest rates are predicted to rise further during the course of 2022, many buyers will be looking to lock in mortgage deals now before further rate rises.
“With so many variables affecting house prices and affordability, the market is extremely difficult to predict, and those looking to buy will be prioritising their own needs and what they can afford rather than waiting to try and time the market.”
First-time buyers
The Rightmove analysis showed first-time buyers will struggle the most to buy a home in the current market. Average monthly mortgage payments (£901) overtook monthly rental payments (£887) for the first time.
In the past decade, historically low interest rates compensated for rising house prices in terms of keeping monthly outgoings low, an advantage that is being chipped away as interest rates start to rise.
Stricter lending requirements also mean that an average earning solo first-time buyer will need to find a 34 per cent deposit now, compared to a 25 per cent one a decade ago.
Combined with rising house prices, this means the average UK first-time buyer now needs a deposit 112 per cent higher than a decade ago.
House prices in London
The property type where new homes are most keenly needed for sale are two- and three-bedroom semi-detached homes, which could explain why most of London’s fastest rising boroughs were in the outer reaches of the capital.
Although Westminster in the heart of the capital topped the London house price table, with prices up 11.7 per cent in a year to £1.46 million, the next biggest price increases were much further out.
Merton in south-west London had the second highest rises, up 11.5 per cent to £737,000, while east London Crossrail borough Havering saw prices rise 10.5 per cent to £483,000.
Asking prices in all boroughs rose over the course of the year, but the lowest increases were in boroughs straddling Zones 1 and 2.
Southwark prices rose 2.8 per cent to £645,000; Lambeth 2.9 per cent to £668,000; Camden 3.4 per cent to £1,004,000; Brent 4.0 per cent to £635,000; and Hammersmith and Fulham 4.1 per cent to £965,000.
