Asking prices for homes in Bath are rising faster than any other city in Britain
Map reveals UK's bidding war hotspots: Asking prices for homes in Bath are rising faster than any other city in Britain with cost of average home increasing by 15% in a year to £558,000
Asking prices for homes in Bath are rising faster than any other city in Britain by an average 15% in a year
In Truro, they have risen by 14.6% to £323,200, while Plymouth and Gloucester have seen rises of 12%
And Southend-on-Sea has experienced asking price increases of more than 13% year-on-year to £343,000
Prices in the ten fastest-rising cities have surged an average 12.6%, compared with 9.9% nationally
The 'bidding war' for homes in Britain has reached new heights, with new data showing prices in Bath are rising more rapidly than in other cities as demand for properties in a string of cities in southwest England is fast outstripping supply.
The average asking price for a property in ancient Somerset city Bath has rocketed by 15% over the past year to £558,000, up nearly £75,000 from when people were looking to sell a year ago, according to research by online property portal Rightmove.
Asking prices in Truro, Cornwall have risen by 14.6% to £323,200, while Plymouth and Gloucester have seen rises of 12% or more - and Southend-on-Sea in Essex has experienced asking price increases of more than 13% year-on-year to £343,000.
Prices in the ten fastest-rising cities have surged 12.6% on average, compared with national asking price growth of 9.9% over the same period. Since the Covid outbreak of 2020, average prices across the UK have increased by more than a fifth.
In those cities where prices are rising fastest, supply is struggling to keep up with demand, the data shows. In the southwest, for instance, the number of houses available for sale has fallen by an estimated 39% in the past 12 months.
House prices have gone wild in the past two years after two years of Covid stay-at-home orders and the WFH revolution caused many people to look to move into bigger properties providing more home-office and garden space.
Tim Bannister, Rightmove's director of property data, told The Times: 'In the first stages of the pandemic we saw the popularity of some major cities, like London, temporarily drop as people looked for more space.
The average asking price for a property in ancient Somerset city Bath has rocketed by 15% over the past year to £558,000, up nearly £75,000 from when people were looking to sell a year ago, according to research by online property portal Rightmove. Asking prices in Truro, Cornwall have risen by 14.6% to £323,200, while Plymouth and Gloucester have seen rises of 12% or more - and Southend-on-Sea in Essex has experienced asking price increases of more than 13% year-on-year to £343,000
'However, for other cities, such as Bath or Plymouth, which perhaps have easier access to the coast and countryside, we saw demand really soar when the market reopened in 2020.'
He added: '[At the start of the Covid crisis], the supply of homes available kept up with some of this surge in demand, steadying asking prices. Now we're still seeing really high buyer demand for cities like Bath, Plymouth and Truro, but the number of new homes coming onto the market hasn't been able to keep up with the buyers enquiring.'
It comes as an index shows that housing market conditions are surprisingly buoyant, with 38% of people actively moving or considering doing so.
The pace of annual house price growth slowed slightly to 12.1% in April, slightly down from 14.3% in March, Nationwide Building Society said. Property values increased by 0.3% month-on-month. Across the UK, the average house price in April was £267,620.
Robert Gardner, Nationwide's chief economist, said: 'Annual house price growth slowed modestly to 12.1% in April, down from 14.3% in March - nevertheless, this is the 11th time in the past 12 months that the annual growth rate has been in double digits.
'Prices rose by 0.3% month-on-month, after taking account of seasonal effects - the ninth successive monthly increase, though this is the smallest monthly gain since September last year. Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels.
'Demand is being supported by robust labour market conditions, where employment growth has remained strong and the unemployment rate has fallen back to pre-pandemic lows. With the stock of homes on the market still low, this has translated into continued upward pressure on house prices.
'Nevertheless, it is surprising that conditions have remained so buoyant, given mounting pressure on household budgets which has severely dented consumer confidence.'
Mr Gardner said people's expectations of their own personal finances over the next 12 months have 'dropped to levels last seen during the depths of the global financial crisis more than a decade ago'.
He added: 'Moreover, housing affordability has deteriorated because house price growth has been outstripping income growth by a wide margin over the past two years, while more recently borrowing costs have increased (though they remain low by historic standards).'
A survey of around 3,000 people for Nationwide this month indicated 38% across the UK were either in the process of moving or considering a move.
Mr Gardner said the proportion was particularly high in London, where almost half said they were moving or considering a move.
Even in Wales, where the share was lowest, more than 25% were either moving or considering a move, he added. These figures are high considering that only around 5% of the housing stock is turned over in a typical year in the UK, he added.
Mr Gardner said: 'For most movers and potential movers, the majority of those surveyed are looking to trade up - the exception being amongst those aged 55 and above, where nearly 40% are looking to move to a smaller property compared to just 7% looking to move to a larger property.'
The research also found 17% of those moving or considering a move said they were doing so at least in part to reduce spending on housing, either by moving to a different area and/or by moving to a smaller property.
Mr Gardner added: 'We continue to expect the housing market to slow in the quarters ahead.
'The squeeze on household incomes is set to intensify with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.
'Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.'
Nicky Stevenson, managing director at estate agent group Fine & Country said: 'The growth environment is certainly being challenged by a cost of living crisis, rising borrowing costs and war in Ukraine. Offsetting this has been a supply crunch which has led to bidding wars and a sense of desperation among buyers.'
Martin Beck, chief economic adviser to the EY ITEM Club, said: 'The squeeze on real incomes from high inflation means fewer people will be able to afford to borrow the necessary amount they need to buy at higher mortgage rates.
'Consumer confidence - including households' expectations of their own personal finances - fell to a near record low in April. And next week's MPC (Bank of England Monetary Policy Committee) meeting is likely to deliver another rise in interest rates, which will push up mortgage costs.
'But just as during the pandemic, the housing market is likely to prove relatively immune to economic challenges.
'Those that can afford to buy are more likely to have accumulated unplanned savings during the pandemic, an element of which may be going towards deposits on houses and flats.
'And cost of living pressures from rising inflation and the increasing price of essentials, such as energy, are weighing heavier on low income households, who disproportionately rent, than the better off, who are primarily owner occupiers or in the market to buy.
'So while a period of relatively sluggish price growth is likely, the EY ITEM Club thinks any serious correction in property values is unlikely.'
Alex Lyle, director of London-based estate agency Antony Roberts said: 'The £1.5million-upwards freehold house market in particular is ferocious. I can't remember a market moving more quickly in that price range.'
He added: 'The pandemic has blurred the seasons; we haven't seen the huge increase in stock coming onto the market which would normally be the case after Easter. The summer may be quieter if families take a proper break for the first time in two years and get on a flight.'
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: 'We think that house price growth will continue to slow from here... True, households could spend part of the savings they built up over the pandemic. But consumers' confidence is extremely weak.'
