Yahoo Finance UK house prices surge to £245,200 amid 'unreasonably' high demand
UK house prices have surged to £245,200 ($321,078) as stronger buyer demand amid constrained stock levels continues to put upward pressure on prices.
According to the latest figures from Zoopla, there was strong house price growth across all regions, with the average home value rising 8.1% on the year, up from 4.2% last February.
The property website added buyer demand remains "unseasonably strong" across the country, with demand for family houses more than twice as high as usual for this time of the year.
Gráinne Gilmore, head of research at Zoopla, said demand remains "elevated" as the trends that emerged during the COVID-pandemic a "continued appetite" for extra internal and external space, drive the market.
"Demand is up across nearly all property types, indicating that those thinking of moving are in pole position to sell."
Zoopla said new listings of homes for sale rose 5% above the five-year average, with listings for sale across the average estate agency branch up 3.5% in the 28 days to 20 March.
The stock of homes available to buy was 42% below the 5-year average, compared to 47% lower in December last year.
But, despite new supply levels increasing this year, it will not be enough to "reverse the overall imbalance" between demand and supply over the course of 2022, Zoopla said.
Increased pressure on household budgets, as well as the geopolitical uncertainty due to the war in Ukraine, will act as a drag on buyer demand during the year, the real estate firm warned.
This will start to ease pressure on pricing, although supply constraints will put a floor under prices.
Sales agreed in the first quarter of this year jumped 38% compared to Q1 2020, according to Zoopla's monthly house price index.
It expects the trend to continue in the coming months, as price growth and high demand triggers more homeowners to make a move.
Read more: UK average house price jumps almost 10% to £274,000 in January
Market activity is also being driven by a bounce back in demand in urban areas since the start of 2022.
At a regional level, Wales has registered the highest annual regional price growth for the 12th consecutive month, at 11.8%, while this has also contributed to 35% price growth over the last five years in the nation.
Despite this, Zoopla anticipates price growth to slow during the second half of 2022 as the surging cost of living, and rising mortgage rates apply a brake to the market.
The capital's price growth was the slowest at 3.2%, although this ranges significantly from an increase of 6.8% in the borough of Bromley to 0% in the City of London.
Zoopla says there is a wide spread of affordability across the country.
The average house price in London is nearly 11 times the average income. In the north of England the average house price is 5.1 times average earnings.
Mortgage rates have already started to rise after the Bank of England hiked its base rate to 0.75% in March. Economists expect at least another quarter-point rate rise this year.
Gilmore added, "The increased economic headwinds, including the rising costs of living and increasing mortgage rates, property price growth will start to moderate as we move through the second half of 2022."
This will act as a "brake" on price growth, with annual value rises returning to more sustainable levels, Zoopla said.
In London, the level of sales agreed is higher than the first quarter of 2021, despite the higher levels of activity 12 months ago due to the stamp duty holiday.
Read more: Buying almost £1,400 cheaper than renting, says Halifax
Separate data from the Office for National Statistics showed, that the average price for a home in the UK jumped £24,000 in a year to reach £274,000 in January. Overall, UK average prices rose 9.6% over the year to January 2022.
