UK asking prices of property continue to rise, according to Rightmove.

The property portal said that the average price of property coming to market rose by 0.3% (or £852) to £341,019 in January.

That’s an increase of 7.6% compared to January 2021, marking the highest annual rate of price growth since May 2016.

Strong demand fuelling price growth

High demand and a shortage of homes for sale is fuelling the housing market, with sellers benefitting from increased buyer competition.

Rightmove found that the number of buyers enquiring about homes is 15% higher than the same time last year, while the number of homes for sale per estate agency branch has fallen to a record low of just 12.

It means that competition among buyers is almost double what it was at this time last year, said the property portal.

But there is some good news in terms of supply.

Busy start for estate agents

The first week of the year was the busiest ever for people requesting agents to come out and value their homes. It means we could see a rise in properties coming onto the market in the coming weeks.

Tim Bannister, Rightmove’s director of property data, said: “New Year sellers and buyers have been quick off the mark this year, with Rightmove recording the highest ever number of Boxing Day sellers coming to market. These early-bird sellers who got themselves ready to come to market are now benefitting from the busiest start to the year that we’ve ever recorded, with the number of prospective buyers enquiring about homes up 15% on this time last year.”

Myron Jobson, personal finance campaigner at interactive investor, added: “The ongoing demand-supply mismatch for property has helped to drive up house prices, with first-time buyer asking prices reaching a record of £214,176 after a monthly jump of 1.4%.

“The property market for first-time buyers continues to be a difficult one, compounded by the rising cost of living which, for many, could push their goal of buying their first home further out of reach. While mortgage rates remain low by historical standards despite December’s interest rate rise, buyers have to save bigger deposits than they did pre-pandemic as UK house price growth has significantly outpaced the rise in average earnings in recent history.”