UK house prices look set for new record highs in the coming months despite the cost of living squeeze.

Residential property prices have continued soaring in recent months despite 30-year high inflation and a worsening cost-of-living crisis, and the signs are that they will rise further in the coming months in light of the ongoing supply-demand imbalance.

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, with the average property price in England and Wales set to hit a new record high of £389,712 in June 2022, according to the reallymoving House Price Forecast.

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, as would normally be expected when households experience sudden financial pressure.

Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete. This enables reallymoving to provide a three – month house price forecast that historically has closely tracked the Land Registry’s Price Paid data, published retrospectively.

Based on deals already agreed between buyers and sellers, prices will rise by 4.7% in April and 6% in May before slowing to growth of 1.3% in June – a direct result of buyer competition for a limited supply of homes during the early months of the year.

However, the market is expected to flatten later this year as inflation bites further and mortgages become more expensive.