House prices rose at the fastest rate on record this month, defying predictions inflation and the cost of living crisis would cool the property market. The average asking price of property rose by 2.3% between January and February, equivalent to more than £7,700. This was the biggest monthly jump in cash terms ever recorded by property website Rightmove. Asking prices hit a new high of £348,804 as buyers flocked to the market undeterred by rising mortgage rates and a chronic shortage of homes for sale. Buyer demand was 16% higher than February 2021 after the number of house hunters had soared for most of last year. Households are facing the biggest squeeze on their finances in a generation and this, alongside more expensive mortgage rates, was expected to dampen buyer demand and limit house price growth. The Bank of England is set to increase interest rates for the third time in a row next month in a bid to curb rampant inflation. Early indicators suggest the acute shortage of homes for sale could also be about to ease, which could also put the brakes on price growth. The number of sellers listing their homes on the market and the volume of people requesting a valuation from an estate agent both rose by 11% in February, compared with the same month last year.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of February 2022 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.