Asking prices for UK homes rose by a record 2.3% in February, property website Rightmove said on Monday, as the easing of Covid restrictions led to a rebound in demand in London with people returning to office work.
The increase was the biggest monthly jump in 20 years, meaning the average advertised cost of a home came to £348,804. Asking prices have risen by 9.5% over the past 12 months.
“This new record means that average asking prices have now risen by nearly £40,000 in the two years since the pandemic started, compared to just over £9,000 in the previous two years,” Rightmove said.
First-time buyers are expected to lose out in the race to buy the few properties on the market.
Beleaguered UK Prime Minister Boris Johnson was due to set out plans on Monday to scrap coronavirus restrictions as part of a controversial strategy to come of the pandemic faster than most major economies.
Rightmove said prices were also driven by the difference between would-be buyers, which rose by 16%, and the number of properties on the market, up by 11%.
Tim Bannister, the firm’s director of property data, said as Covid restrictions were lifted “we now have a group of movers who are looking to return closer to major cities, or at least within comfortable commuting distance of their workplaces”.
London property prices, which had stagnated after the Brexit vote in 2016, recorded the biggest annual jump in inquiries to estate agents of any region – up 24% year on year.
The capital also had its highest annual rate of price growth in the last five years as the end of pandemic restrictions and a return to the office made London and its suburbs an attractive option again.
Lender Nationwide earlier this month said sale prices in January were up by 11% on the same month in the previous year, giving house price inflation in 2022 the strongest start since 2005.