The average price of property coming to market added 0.3%, or £852, to hit an average of £341,019, which is 7.6% higher than in January 2021, the highest annual rate of price growth recorded by Rightmove since May 2016.
First-time buyer asking prices reached a new record of £214,176 after a monthly jump of 1.4%.
Strong demand and continuing low numbers of available homes for sale set up the housing market frenzy to continue into the start of 2022, with early-bird sellers benefitting from increased buyer competition.
The number of buyers enquiring about homes is 15% higher than the same time last year.
The number of available homes for sale per estate agency branch dropped again to a new record low of just 12.
Property industry reaction:
Guy Gittins, CEO of Chestertons, commented: “We expect the market to remain buoyant for at least the first quarter of 2022 as London is seeing the return of office workers, international students as well as Londoners who left the capital during the peak of the pandemic but are now seeking a return to the hustle and bustle of the city.”
“London’s property market cannot currently meet the demand from house hunters which, inevitably, has led to a very competitive market for buyers and rising prices. To secure their ideal property, buyers are advised to put themselves in the best possible position by having their finances and paperwork in place prior to starting their search as it will enable them to act fast.
North London estate agent, Jeremy Leaf, said: “Asking prices continue to rise, which is not surprising bearing in mind the lack of supply. Market appraisals are on the rise as well, but not fast enough to provide more of a balance between supply and demand.
“Rising asking prices are all very well but transaction numbers are more important and a more reliable snapshot of the health of the housing market. Lack of supply is holding back transactions, which is not good news for the property market or the wider economy.
“It is of particular concern that first-time buyers are being asked to pay yet more to get a foot on the ladder. More realistic pricing is essential if first-time buyers are not going to be priced out of a purchase completely.”
Managing director of HBB Solutions, Chris Hodgkinson, commented: “There’s certainly been no New Year’s change where the UK property market is concerned and homebuyers are still swamping the market while house prices continue to defy the ‘what goes up must come down’ mantra.
In fact, with stock levels remaining low, this fresh wave of demand is pushing asking prices even higher than the stamp duty fuelled thresholds of last year.
When you also consider that the cost of borrowing is still very low, we can expect more of the same where property market performance is concerned in 2022.”
Director of Benham and Reeves, Marc von said: “There have been no signs of a sluggish start to the year for the property market and not only are we seeing a very strong level of buyer activity, but we’ve also been inundated with requests from potential sellers keen to make the most of these buoyant market conditions.
We’re now seeing a strong level of activity returning to the London market and the capital’s forecast is far brighter for the year ahead, having been uncharacteristically left in the shadows during the pandemic house price boom.
Overseas buyers are returning in their number and the capital is hotting up as the time to sell a home reduces and stock availability comes under pressure.
If buyers are quick there is still an element of ‘old stock’ that has been stuck on the market and these opportunities can potentially be snapped up at relatively decent price levels – for now.”
The founder and CEO of GetAgent.co.uk, Colby Short, remarked: “Many home sellers will have listed their home prior to the festive break in anticipation of a fast start to the year and this proactive approach is now paying off as many are already accepting offers on their homes.
However, for those buyers who are struggling to find their ideal home, there is hope for the year ahead. Now that the dust has settled following the final stamp duty holiday deadline, we’re seeing a significant increase in the number of sellers heading to market.
So we can expect to see a good level of fresh stock materialise over the coming months, bringing greater choice to buyers and adding yet further fuel to the house price growth furnace.”
Tomer Aboody, director of property lender MT Finance, said: “With such a lack of supply of good properties on the market, combined with plenty of cheap mortgages, buyers are pushing themselves to make sure they don’t miss out and asking prices continue to rise as sellers take advantage. If that means having to pay more for a home, then many buyers are prepared to do so.
“With inflation continuing to rise and higher mortgage rates likely at some point, this situation is unlikely to change in the short term if the supply situation does not improve. It remains to be seen what will happen as something approaching ’normality’ returns and things settle down.”