The average asking price for a property coming onto the market has hit six record highs in the last 12 months.
This month, the average passed the £300,000 mark - more than 50 per cent higher than it was ten years ago.
Miles Shipside, a housing market analyst and director of Rightmove, said this highlights a growing problem for potential first time buyers and trader-uppers.
“While the start of 2016 has seen an encouraging but modest uptick in the number of properties coming to market, demand and momentum have combined to push prices over £300,000,” he said.
“On average 30,000 properties have come to market each week over the past month, up by 3 per cent on this time last year, but there are insufficient numbers of newly-listed properties in many parts of the country to meet demand.
“Visits to the Rightmove website are up by 14 per cent in early March compared to the same period in 2015, so it’s no surprise that those buyers who can borrow more or can find some extra cash are keeping the price merry-go-round spinning, even though increasing numbers of aspiring home-movers cannot afford the ride.
“More first-time buyers and would-be trader-uppers are finding themselves ill-equipped to cope with current house prices given the tighter lending criteria and average earnings lagging well behind house price growth. However, stronger growth in average earnings would not have helped the situation as it would simply have enabled buyers to bid prices up even higher, chasing the limited supply of suitable housing stock. In last week’s Budget the Chancellor could have encouraged landlords and second home owners to sell their properties and improve supply if he had extended the reduction in Capital Gains Tax to include those transactions. With no other significant property-related new measures in the Budget it at least allows time for his raft of recent initiatives to bed in.”
A statement from Righmove said: “The increasing challenges of both getting onto the ladder and trading up are highlighted by the 50 per cent increase in the price of property coming to market in just ten years. With that timespan including the period after the credit crunch which saw several years of falling or stagnant property prices, it shows the strength of the recovery for today’s £303,190 average to be over £100,000 higher than the £200,980 of March 2006. “In contrast, average wage growth of 22 per cent over the most recent ten years has failed to keep pace with CPI inflation of 26.8 per cent which highlights the well-documented issues of raising a deposit and affording a mortgage. The rebound from the housing market downturn has been driven by underlying demand, greater availability mortgage lending, and the economic recovery.
“The release of this pent-up demand and the shortfall in housing supply are resulting in insufficient availability of affordable stock in many locations.
“This month’s national average 1.3 per cent jump in the price of property coming to market is the second-highest at this time of year since the 2008 credit crunch. The break through the £300,000 mark is not being driven by London, where prices are at a standstill. Upwards price momentum and stretched affordability are spreading north and west, with six out of ten regions achieving record asking price highs. All four southern regions are joined by the West Midlands and the North West, with the East Midlands being only £373 shy of an all-time high.”
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