Rightmove ponders: Will Ukraine hurt the UK housing market?

The jury is still out on whether the Ukraine crisis will damage public confidence in the UK housing market.

Rightmove’s property data chief Tim Bannister says: “It’s too early to know how the UK housing market will be affected by the longer term economic impact of the abhorrent and devastating war in Ukraine. All we can use as a measure for now is the level of UK buyer and seller activity. 

“When the war started we initially saw slightly lower buyer demand but this has now stabilised. 

“Our forecast is that overall transaction numbers for 2022 will revert back to pre-pandemic levels, as the market returns to a more even balance. Currently, the number of sales being agreed by estate agents is 11 per cent higher compared to the same period in the more normal market in 2019.”

Bannister says all sectors of the market are currently experiencing very brisk conditions but Rightmove expects the supply and demand balance to move much closer towards equilibrium as the year progresses. 

“There are headwinds that seem likely to remove the current market froth in the second half of the year” he adds.

“We’ve just seen interest rates rise again, and there are further incremental increases forecast for the year which will raise mortgage rates for some. Inflation and cost of living increases are also likely to affect buyer affordability and market sentiment.”

The portal’s latest monthly housing market snapshot has been released this morning and shows another new price record as the average price of property coming to market jumps by 1.7 per cent to £354,564, breaking through the £350,000 barrier for the first time.

The average monthly rise is the largest seen at this time of year since March 2004, pushing the annual rate of increase to 10.4 per cent, with all regions and countries except London and Scotland now up over 10 per cent annually.

The most expensive sector of homes with four or more bedrooms has seen an average 3.8 per cent monthly price surge encouraging new sellers to come to market, with 12 per cent more new listings in this sector than at this time last year.