UK house prices show 'biggest seasonal rise since 2015'

Shortage of property for sale is driving up prices, says property website

For sale signs advertise residential properties in north London, Friday June 12, 2003. Bloomberg News

Asking prices for British homes between mid-May and early June rose by 0.8 per cent compared with a month before, the biggest rise for the time of year since 2015, as housing remains in short supply, property website Rightmove said on Monday.

The increase is less than the 1.8 per cent recorded a month earlier but still takes asking prices 7.5 per cent above their level in early March 2020, before Britain went into its first Covid lockdown.

"Buyer demand remains very strong, though with an all-time low in the number of properties available for sale and new stock at higher-than-ever average prices, there are early signs of a slowing in the frenetic pace," said Tim Bannister, Rightmove's director of property data.

Rightmove, which says it advertises 95 per cent of homes for sale in Britain, collected the data between May 9 and June 12.

British house prices surged last year despite the pandemic as many richer people sought more space to work from home, and the government cut stamp duty to reverse an initial slump in sales early in the pandemic.

June is the last month when the full tax break applies before it is wholly phased out in October.

Britain's official measure of house prices, based on completed transactions, showed prices in the year to April rose 8.9 per cent, after a 9.9 per cent increase for the year to March.

Rightmove said the most expensive homes were having the biggest percentage increases in asking prices.

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Typically these were detached houses with at least four bedrooms, with buyers less stretched for cash.

London has had weaker prices and demand than other parts of Britain, due to a fall in the number of foreign buyers and less need for many high-paid workers to commute to city-centre jobs.

Separate figures from property data company LonRes showed prices were 1.9 per cent lower in expensive parts of the capital than a year ago.

The number of new listings in central London was 33 per cent higher in May than two years before.

"Demand is not outstripping supply in most areas of prime London," said Marcus Dixon, head of Sales at LonRes.

"Estate agents' windows have, for the most part, stayed well stocked, meaning prices have not seen the rapid growth experienced in other parts of the country."