House prices have pushed higher for the sixth consecutive month, Rightmove reported on Monday, fuelled by a shortage of homes for sale.
According to the property website, the average price of property coming to market rose by 0.4% to £369,968 in July compared to June, or by 9.3% year-on-year.
As a result, Rightmove has now revised up its 2022 full-year forecast for house price growth, to 7% from earlier guidance for 5%.
It found “a continuing desire to move and low numbers of homes for sale” were driving price growth, despite the cost of living crisis. While the number of sellers rose 13% on 2021, the number of available homes for sale was down 40% 2019.
Buyer demand, meanwhile, was 26% higher than the same period in 2019, Rightmove found, although it as down 7% on June 2021.
Tim Bannister, director of property science, said: “Though a softening in demand is moving the market from a boil to a simmer, it remains 26% up on 2019. With such an imbalance remaining between supply and demand, prices look underpinned and we would therefore only expect typical smaller seasonal month-on-month falls, rather than more significant price falls in the second half of the year.”
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Asking prices are booming again in July, as the white hot market convinces sellers they can keep pushing prices skywards. However, that’s only half the story.
“Asking prices tend to obscure more subtle moves in the market, and we’re seeing a number of small but important changes. With the number of buyers continuing to fall, and the number of sellers starting to rise, the imbalance that has pushed prices higher – even as tougher times have hit – could be starting to unwind, which would pour cold water on the overheated market.”
Victoria Scholar, head of investment at Interactive Investor, said: “While the data points to ongoing strength in the UK housing market, it looks as though we could be starting to approach the peak, given the cost of living crisis rising interest rates and signs from the data that the economy looks set to cool.
“However, for now, the market continues to be supported by the overall shortage of supply as well as buyers who are choosing to act now rather than wait for when mortgages become expensive.”