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Property prices on the rise

Property prices on the rise

Category: Mortgages

Updated: 18/05/2009
First Published: 18/05/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The average asking price of a UK home increased by £5,000 last month – the fourth month-on-month increase in succession.

The 2.4 per cent rise means that the average asking price for a property rose to £227,441 in the four week period to 9 May, according to Rightmove.co.uk.

This jump is the largest May increase the property website has recorded since 2003, when the property market was buoyant with annual rises of 15 per cent or more.

However, talk of a rapid market wide recovery have been quickly quelled; experts have warned the rise is most likely due to homeowners pricing their property at high levels because they fear their equity could be eroded to dangerous levels.

The high asking prices are also being driven by a dearth of available property; just 61,000 new homes were put on the market during the month compared with 135,000 in the same period last year.

Almost as many homes (59,000) had their prices cut by more than two per cent in the last four weeks.

Miles Shipside, commercial director at the website, said the long term worry is that the supply side of the housing market will now be compromised for many years to come.

"While some of the impetus behind the increase of over £5,000 in average asking prices will be due to ambition or optimism, it will also be out of necessity as new sellers attempt to scrape together enough equity to move," he added.

Meanwhile, the National Association of Estate Agents (NAEA) has reported that estate agents sold more houses in April than in any other month since October 2007. On average, agents sold ten properties in April, up from eight in March and a low point of five in August 2008.

Chief executive of the NAEA, Peter Bolton King, said: "Six months ago, people were talking about how British people's attitude to owning property has changed in the recession.

"The NAEA always said this was nonsense, and that demand for property remained strong, but confidence on the market had gone. These figures show that this confidence is returning."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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