Bigger than expected asking price surge - but market still cooling

The average asking price rise for homes coming to the market in the last month has been a chunky 1.3 per cent - the same as March 2015, when the market was being fuelled by frantic purchasing of buy to let property ahead of the stamp duty surcharge deadline.

The data, from Rightmove, says the price rise of the past month has only been exceeded once at this time of year since the heady market of 2007. 

However, annual asking price growth is now only 2.3 per cent - around a third of the level this time last year, and an indicator of a generally slowing market, advises the portal. 

The 1.3 per cent average asking price rise in the past four weeks is equivalent to £3,877.

“Since the start of the decade, the average March price rise has been 0.9 per cent so this month’s 1.3 per cent uplift is an indicator of a shortage of suitable property for sale in many parts of the country, with strong demand for the right property at the right price”   says Miles Shipside, Rightmove director and housing market analyst.

“While six consecutive years of price rises have been a gravy train for many home-owners, some of them are running into the buffers of affordability when they come to trade up. Meanwhile many would-be first-time buyers are being left waiting on the platform struggling to even get on board” adds Shipside. 

“Modest average wage rises and tighter lending criteria have limited buyers’ ability to pay more. While credit is cheap, if there are limits on its availability then the pace of rise has to slow even though demand for housing is high. Many buyers are being forced to be price-sensitive, so sellers have to be wary of over-pricing if they want to sell.”

In regional terms, asking price rises in the East and West Midlands are outstripping all other areas. 

The East Midlands is up by 5.7 per cent or almost £11,000 year-on-year; the West Midlands region has the second highest annual increase with prices up 4.2 per cent of £8,658. 

“The pace is no longer being set by the more affluent commuter-belt south, including London with its international appeal. Neither is it set by the cheaper north driven by a mass of investors swooping on high buy-to-let yields.  As markets in other areas of the country become more mature and run out of price-rise steam and froth, the fundamentals of the Midlands have come to the fore” concludes Shipside.