Rightmove’s latest house price index shows new seller asking prices rose by just over £5,000 (1.5%)- marking the biggest increase in the past 10 months.
The news comes as a house price fall was also off the cards, as the latest data by Nationwide reveals prices were up for the first time in over a year.
The average asking price is now £368,118, compared to £362,839 in February.
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Sales agreed were up 13% compared to a year ago, driven by asking prices still averaging below the May 2023 peak of £4,776.
But, prices continue to rise due to spring optimism and more buyers entering the property market, with buyer demand up 8% compared to this time last year.
Tim Bannister Rightmove’s director of property science said: “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway.
“However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.”
Despite the optimism that the market has reached pre-pandemic levels, the property site warns, “the market remains sensitive to pricing and external events.”
This comes as the Chancellor missed any mention of help for first-time buyers in his Spring Budget.
Plus, with mortgage rates on the up again, Nannister says: “There are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers.”
Where are asking prices rising?
Despite affordability issues across the UK, London sees the highest average asking price compared to a year ago, as the appetite for buying property remains.
Rightmove says the demand has been pushed up by more people returning to work in the city, slowing inflation and wage increases.
Marc von Grundherr, director of estate agent Benham and Reeves said: “While mortgage affordability remains an issue, it certainly hasn’t dampened the appetite of London buyers and we’ve continued to see a high level of activity at all price thresholds, but particularly across the superprime market.
Buyers at the very top end of the ladder are acting with great confidence, with the higher cost of borrowing not presenting the same obstacle as the average homeowner.”
East Midlands saw one of the biggest jumps monthly in asking prices- up 2.7%. The average property price stands at £247,054 in the region.
The South West of England follows with a 2.4% monthly rise, taking the average asking price to £383,889.
Is now a good time to buy?
According to Rightmove, the property market has a spring in its step during the warmer season which has put upward pressure on asking prices.
And even though the average is below the May 2023 peak, asking prices have surpassed the historic 1% March rise previously- indicating it could be a good time to buy.
Bannister from Rightmove advises: “For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy as we now seem to be past the bottom of the market.”
The Bank of England’s (BoE’s) base rate has also stabilised since August, which has fed through to this year's mortgage rate cuts.
That said, Bannister believes “buyer affordability remains stretched and higher mortgage rates are an ongoing challenge.”
Mortgage rates have crept up again with the average five-year deal standing at 4.84%- up from 4.64% five weeks ago.
“With the market still sensitive to pricing and external events, some caution and willingness to negotiate is advised for sellers who are keen to find a buyer in the Spring market,” he adds.
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