Home buyers see asking prices soar by nearly £8,000

A shortage of homes being put up for sale has led to rising asking prices and frustration for buyers, two reports suggest.

The average asking price for a property in Britain has risen by £7,785 in February compared with last month, property portal Rightmove said.

This was the largest month-on-month rise for 20 years, it said.

High-end estate agent Savills found buyers could also be affected by the rising cost of living.

Spring is traditionally the busiest season for the housing market.

Rightmove said high demand among buyers was being driven by those looking for more space and who were ready to move on from their first homes.

City property, particularly in London, was more highly sought after than during the pandemic, with some workers being encouraged to return to the office.

The increase in demand has pushed the average asking price across Britain to a record £348,804, according to Rightmove.

This demand for properties was being frustrated, according to Savills, by a lack of homes on the market.

Nearly two-thirds (65%) of potential buyers said the lack of available homes was having a severe effect on their ability to buy, according to a survey of people registering with the estate agent earlier this month.

Stock shortages appeared to be particularly acutely felt at the top end of the market, with 94% of buyers with a budget of £1m or more reporting a lack of choice.

Nearly half (48%) of potential buyers had been considering a move for more than a year, with half (50%) hoping to complete within the next six months.

Frances Clacy, research analyst at Savills, said: "The imbalance of supply and demand, coupled with existing high levels of property wealth, will continue to fuel price growth in the coming months, despite the recent (Bank of England) rate rises."

But she added that "realistic pricing" would become more important as the market felt the knock-on effects of the rising cost of living.