Excess demand over supply is the greatest for a decade and 34% higher than last year sending house prices even higher.
Potential buyers enquiring about property is 34% higher than a year ago and the greatest excess over supply for a decade according to Rightmove as average asking prices rise 0.8% or £2,484 for the month.
Demand from first time buyers and home movers has not abated and the start of the spring selling period has seen sales agreed up 12% in the first week of March compared to last year.
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The extension of the stamp duty holiday and new 95% mortgage scheme is encouraging sellers as new listings compared to last year are only -5% down in March improving from -20% down in February.
Asking prices lower in London
Average asking prices in the country are up 2.7% over the year at £321,064 with only London falling -2.2% and the North West lower by -0.6% annually.
This table from Rightmove shows the highest annual change of average asking prices for the top ten London boroughs to March 2021.
| Borough | Asking price | Annual change |
|---|---|---|
| Croydon | £451,515 | 5.7% |
| Barking and Dagenham | £329,934 | 5.0% |
| Bexley | £465,709 | 4.8% |
| Enfield | £358,361 | 3.4% |
| Redbridge | £468,487 | 3.1% |
| Newham | £431,587 | 2.9% |
| Havering | £420,800 | 2.6% |
| Hillingdon | £495,049 | 2.4% |
| Hackney | £645,319 | 2.0% |
| Bromley | £550,601 | 2.0% |
| Lewisham | £483,939 | 1.7% |
Due to lockdown there has been a shift in interest to properties with more space and outer London boroughs have seen asking prices rise.
Leading is Croydon with a 5.7% annual rise in asking prices and average values of £451,515, Barking and Dagenham up 5.0% and Bexley up 4.8%.
For older homeowners higher values allow equity release buyers to access cash using a lifetime mortgage which can be used to repay your current interest only mortgage or buy a new car.
There is a lack of supply of new homes in outer regions of the capital has allowed sellers to achieve good prices although prime central London property remains subdued.
Westminster borough has seen asking prices fall -14.9% annually to an average value of £1,272,309 followed by Camden down -8.0%, Tower Hamlets lower by -6.6% and Kensington and Chelsea down by -6.0%.
Demand is reducing inventory of homes
Over the last six months the inventory of homes across the country has been eroded by high demand as buyers take the opportunity to find more suitable places to live.
The lockdown has focused homeowners on what is really important if you have to work from home such as space for an office or a garden.
This could mean buy-to-let landlords may need to improve their existing properties or otherwise sell if there is less demand from tenants to avoid vacant periods.
Estate agents have seen average stock levels reduce from 66 in November 2020 to 57 in February 2021 and about two out of three properties are now sold subject to contract.
If remortgage buyers decide to stay in their existing home rather than trade up or downsizing, this could also help to reduce the supply of suitable properties on the market.
The shortage of properties on the market has kept average asking prices high with second steppers rising 4.3% annually with values of £293,028 and the top of the ladder up 4.2% and values of £571,983.
What are your next steps?
Speak to our experts at London City Mortgages if you are planning to move home, buying your first home or remortgaging your property. Learn more by using the equity release calculator and property value tracker chart.
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Begin the equity release quote and our LCM advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay your current mortgage or home improvements.
