Average home prices across the UK climbed 0.9 percent in September to an all-time high of £294,834, research published by online real estate agent Rightmove revealed today.
The surge was the biggest monthly increase in 13 years and was driven by strong demand from wealthy buyers and persistently tight supply.
On an annual basis, asking prices have climbed 6.5 percent.
“High demand, lack of suitable supply, and increasingly stretched affordability are leading to some extremes in market forces in different sectors and parts of the country,” said Miles Shipside, director at Rightmove.
London led the rally with home prices rising 2.2 percent from August to £620,003. Within London, the three best performers were the districts of Southwark, Kensington and Chelsea and Richmond upon Thames, each gaining about eight percent on average. Year-on-year, prices in the capital have climbed 9.4 percent.
If London homes continue appreciating as they have, prices could easily reach £1 million by the end of 2020, Rightmove noted.
“While we are not suggesting that this level of growth can or will be maintained, this extrapolation illustrates the desperate need for building and more affordable housing in and around the capital,” Shipside noted.
Rightmove also highlighted that the number of properties coming to market was down 6 percent on the same period in 2014. This figure is in close agreement with another recent set of data published by online estate agent House Simple, which found that listings fell by 6.6 percent in August.
“Across the country there are thousands of frustrated buyers, with finance in place, ready to purchase, but the property supply reservoir has dried up,” said Alex Gosling, the House Simple’s chief executive officer, noting that the May general election had been expected to buoy selling appetite.