"The latest data shows prices rising sharply in May based on activity in February, suggesting that for now the housing market will continue to defy expectations."
Based on deals agreed between buyers and sellers over the last three months, Reallymoving's data shows that prices will fall by 0.9% in March and 0.2% in April before surging upwards by 6.7% in May – a direct result of buyer competition for a limited supply of homes during February.
News in early February of a second base rate rise in three months, taking interest rates to 0.5%, has had little effect on demand, with many movers keen to do a deal as quickly as possible and lock in a fixed rate deal at the lowest price.
Annually, price growth is expected to hit 11.9% in May, albeit against a notably low average price in May 2021.
Reallymoving says the conflict in Ukraine and the impact of sanctions on Russia, particularly on the cost of energy and fuel, is likely to have an impact on affordability and consumer confidence going forward, but so far this has been masked by the stock shortage forcing buyers to compete for homes.
Rob Houghton, CEO of Reallymoving, commented: “Last month we saw some early signs that the market may be beginning to slow but the latest data shows prices rising sharply in May based on activity in February, suggesting that for now the housing market will continue to defy expectations.
"We’re seeing a clash of post-pandemic driven buyer demand and a cost-of-living crisis which is only now really beginning to bite, and as yet it remains a seller’s market and the supply/demand imbalance is continuing to push up prices. It’s too early to assess the impact on consumer sentiment from the war in Ukraine and if uncertainty grows and prices rises become more painful, I expect we’ll see the tables begin to turn."
