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House prices rise on limited supply: Rightmove

House prices in February 2021 grew 3 per cent on an annual basis, shows Rightmove’s latest house price index.

Measured monthly, house prices rose 0.5 per cent compared to falling 0.9 per cent between December 2020 and January 2021, and in doing so became the first positive move in this direction for three months.

The average UK house price now comes to £318,580, the data shows.

Rightmove says that a supply and demand imbalance is causing this rise in prices – new seller numbers are down 21 per cent over the past four weeks compared to a year ago, which is believes could be due to a delay in family homes moving into the market because of home-schooling demands.

Backing up this belief is the fact that there are 25 per cent fewer houses with three or more bedrooms on the market while those with two bedrooms or fewer are down by 16 per cent.

The data also shows that visits to Rightmove in February 2021 were up 45 per cent compared to a year ago, 18 per cent more enquiries were sent and purchases agreed rose by 7 per cent – the much-talked about 31 March cliff-edge does not seem to be affecting demand.

“Early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post – election ‘Boris bounce’”, says Rightmove director of property data Tim Bannister.

“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure. These are strong signs that new buyer demand is not facing a cliff-edge after 31 March.

He adds: “It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”

Original Article from Mortgage Strategy 15/02/2021

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