Average asking prices rose by 0.8% in the month to mid-March to reach £365,357, according to Rightmove – a £3,000 increase.

The property portal said this was more than the usual March price hike of around 1%.

Prices are now up by 3% in a year, but down £5,800 from the peak in October.

Prime properties driving growth

A rise in asking prices on expensive homes is driving the overall asking price growth, according to Rightmove. It found that there was a 1.2% rise in asking prices of the most expensive properties, but actual sales of these pricey homes are 10% behind the same period in 2019.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Sellers are taking a punt on higher asking prices. They’re hoping falling mortgage rates and the spring selling season will support some fairly optimistic pricing – particularly at the pricier end of the market.

“Unfortunately, there are a few signs that some of this confidence may be misplaced, and that they may well need to do a deal to secure a sale.

“This end of the market isn’t shifting as fast as it did in the same period in 2019, or as fast as slightly smaller homes. It’s a reasonable indication that they may not quite achieve these prices.”

David Hannah, group chairman at Cornerstone Tax, was more bullish. He added: “Over the whole of 2023, I expect low to mid to single-digit growth in the UK property market. Despite the negative headlines we have been seeing, there is an underlying pressure on the market, fuelled largely by an undersupply of housing and that will lead to upward pressure on prices.

“New research from the Home Builders Federation (HBF) suggests the supply of new homes will fall below 120,000 annually in the coming years – this is some way short of the government’s 300,000 target.

“I think that with inflation having subsided slightly, and the government predicting it to fall below 3% by the end of the year, this has also had a positive effect on consumer confidence. Adding to this, and though they remain high, mortgage rates have also fallen which will have reduced issues of affordability for some prospective homebuyers. Due to these factors, I expect that rather than seeing prices fall by the end of the year, I think we will see growth of around 5-8%.”