Supply squeeze boosts asking prices

The average homeowner in the UK is now demanding £222,859 for their property, a full 13.5 per cent more than this time last year, and 0.5 per cent up on December as a chronic deficit in supply takes its toll on the UK housing market.

The new research by Rightmove highlights the lack of properties on the market, with stocks at their lowest levels for this time of year since 2004.

Asking prices for flats and terraced houses rose by the quickest amount over the last quarter as demand continues to fuel a boom in house price inflation.

Miles Shipside, commercial director of Rightmove commented: "Stock levels per estate agent at the start of the year have not been this low for three years, and are 18 per cent lower than at this time last year.

"Where there are shortages of property, prices will keep increasing and properties will keep selling, in spite of the latest interest rate rise."

He added that the latest round of interest rate rises would hurt new homeowners.

"Slowing property prices by raising interest rates several times in quick succession is not only incredibly painful for existing and potential homeowners' mortgage payments, it's a high risk strategy for the economy given the possibility of rates going too high," he said.