The forward-looking index, which captures the purchase price buyers agree to pay when they search for conveyancing quotes, suggests that the imbalance between supply and demand will continue to drive prices upwards through the spring despite growing pressures on household finances and rising borrowing costs.
The supply crunch, which has seen the volume of properties for sale plummet to record lows, combined with unseasonably strong buyer demand, is preventing sale prices from falling, Reallymoving’s data found.
Based on deals already agreed between buyers and sellers, it predicted that prices will rise by +4.7% in April and +6.0% in May before slowing to growth of +1.3% in June.
The rises are said to be a direct result of buyer competition for a limited supply of homes during the early months of the year.
After the Bank of England increased the base rate 0.75% last month, the current run of house price growth is likely to slow later this year, according to the data.
House prices have risen by more than 10% compared to this time last year and are £66,000 higher than when the pandemic started.
For first-time buyers that are tempted to wait for a decline in house prices, Reallymoving says buying with a long-term view will help ride out any short-term fluctuations and locking in a fixed-rate deal will help save money in the long run.
Meanwhile, for those looking to downsize to a smaller property as the cost living cost continues to rise, data suggests releasing equity now will help to secure the maximum price for the property.
Reallymoving chief executive Rob Houghton says: “House price forecasts for the coming quarter suggest we’re heading into a period of strong price growth, but when taken in the wider context what we’re actually seeing are prices being inflated by a severe supply squeeze.”
Houghton explains: “This is forcing the market upwards, masking the impact of inflation and rising costs on household budgets which we would normally expect to rein in price growth.”
“Having less money in their pockets will ultimately deter people from taking on more debt as they move up the ladder, and at some point in the near future, this will slow house price growth. Much will depend on the volume of new listings we see coming onto the market and the speed at which lenders push up the price of fixed rate mortgages,” he adds.