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Asking prices for U.K. homes hit a record high for a third-straight month, driven by a shortage of properties on the market.
Rightmove Plc said the price sellers sought in April was 9.9% higher than a year ago at 360,101 pounds ($463,598). The online property portal described it as a “frenzy” and said all regions and all segments of the market hit record highs for the first time since 2007.
Britain's housing market continues to boom despite three back-to-back interest rate increases and a squeeze on household finances from rising taxes and energy bills. The market is suffering from a chronic under-supply of new homes for sale.
“It can't and won't continue like this, but with the demand and supply imbalance being so out of kilter, it looks like any substantial slowdown will be gradual in coming and be a soft rather than hard landing,” said Tim Bannister, director of property data at Rightmove.
A temporary sales tax holiday in response to the pandemic has further distorted the market. People looking to upgrade their homes brought forward their decisions to take advantage of the tax break, which ended last September.
That's contributed to a vicious circle, keeping the supply of homes available to purchase at historically low levels, according to Tom Bill, head of U.K. residential research at Knight Frank. The lack of purchase options also means some sellers are holding back, exacerbating the problem, he said.
“Registering your interest to buy involves less commitment and risk than putting your house on the market, helping to create the current imbalance,” Bill said. “However, there are early signs this spring that supply is beginning to build, which will help bring house prices back down to earth.”
The report, released on Monday, also showed that:
- More than half of properties sold at or above the asking price, the highest level on record.
- Sellers were able to find a buyer twice as fast as in 2019, in just 33 days from listing the property to marking it sold, the fastest ever rate.
- Monthly asking price growth was highest in the southwest of England, where homes sold most quickly, in an average 28 days.
Read more:
- Pound Hits Lowest Since Lockdown on Signs U.K. Recovery Slows
- U.K. Home Rental Costs Rise at Record Pace, Rightmove Says
- U.K. Faces Worst Inflation Shock Among G-7 Nations, IMF Says
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