"A combination of high-demand and low-availability, coupled with the looming presence of further increases in interest rates, has contributed towards a rapid increase in house prices in March."
The monthly growth is the largest seen at this time of year since March 2014, the data shows.
Rightmove says rising house price are “being stoked by the greatest imbalance between buyer demand and the number of properties available for sale that we have ever measured at this time of year”.
Conor Murphy, CEO at Smartr365, said: “A combination of high-demand and low-availability, coupled with the looming presence of further increases in interest rates, has contributed towards a rapid increase in house prices in March. Spurred by the threat of costlier rates later in the year, prospective buyers are choosing to bite the bullet and complete home purchases, but in doing so continue to pay record prices due to the short supply of available properties.
“Much of this activity is governed by continued fears around the predicted impacts of a cost-of-living crisis and a rise in interest rates, but as the picture becomes clearer over the coming months we should enter a calmer, levelling off period. Ultimately, today’s figures speak of a reassuring demand for UK property unhampered by external factors and reflect positively on the future of the market.”
“Looking ahead, channelling positive demand should emerge top of advisers’ list of priorities. Intermediaries need to make the process as efficient as possible, by easing the mortgage journey for borrowers who may be daunted by pressures, such as the cost-of-living crisis, for example. Furthermore, mortgage tech can be used to support on some of the more time-consuming day-to-day tasks, leaving intermediaries with greater capacity to offer valuable expert advice.”
Tomer Aboody, director of MT Finance, commented: "With another jump in asking prices, buyers are not risking hanging around in order to secure their new home, prepared to pay record prices due to lack of supply.
"Motivated buyers are taking advantage of current low mortgage rates before further, anticipated increases, are introduced.
"Sellers are cautious about not being able to find a home for themselves to buy, but some are taking the risk, selling at record prices with the view to waiting for the market to cool a little and renting in the meantime. They may hope that there will be less competition at this point, and therefore they will be able to buy at a lower price point."
Jeremy Leaf, north London estate agent and former RICS chairman, added: "Although Rightmove reports that asking prices aren’t rising quite as rapidly this month compared with last, overall the numbers are still strong, reflecting the continuing huge mismatch between supply and demand.
"In our offices, we have found stronger interest in higher value, larger family homes where buyers seem to find it easier to shrug off concerns about rising interest rates and events in Ukraine having an even more serious impact on household expenditure than previously. Nevertheless, transaction numbers are down a little from the heady days of most of last year, and transaction times are lengthening.
"Flats are a different story, particularly those without outside space and good connectivity, where stretched affordability and deposit raising is more of an issue. As a result, flat prices will probably soften rather than correct but are certainly not going out of fashion completely now hybrid work patterns are more firmly established."