House asking prices rocket
THE average asking price of a UK property has leapt by 2.4 per cent this month to £227,441, according to data from property website Rightmove data published today.
The rise marks the largest monthly increase in asking prices since 2003 when property prices were on a rising trend, but overall asking prices remain 6.2 per cent lower compared to a year ago.
The number of properties coming onto the market are also at their lowest level for six years, with just 61,000 new sellers this month, compared to 135,000 last May.
Rightmove commercial director Miles Shipside blames the level of available properties on “equity immobility” with sellers lacking the funds to move, and says more affordable mortgage products with higher loan-to- value ratios are needed.
“The scale of the problem is potentially far worse now than in the 1990s downturn. It is impossible to put a timescale on this,” he added.
Nonetheless, Rightmove’s recent consumer confidence survey, based on the views of 22,000 home buyers, indicated the outlook for house prices is positive with six in ten potential home owners now expecting prices to remain the same or increase over the next twelve months.
The most recent official statistics indicate UK house prices are continuing to fall, although the pace of that decline has slowed. According to the Department for Communities and Local Government, UK house prices in March were 13.6 per cent below their levels of one year earlier, with January to March seeing an average 3.8 per cent fall compared with a decline of 6.4 per cent in the three months to the end of December.
Rival indices, such as Nationwide and Halifax, show a similar picture.
HOUSE PRICE FALLS
THE housing market, which has suffered a dizzying decline over the past 18 months, is beginning to show some signs of stabilisation.
While house prices fell by more than expected last month, returning the average price of a house to where it was in 2004, according to the most recent Halifax data, April’s 1.7 per cent drop was the smallest monthly decline since December.
The Nationwide index also suggests the pace of falls has declined, recording a 0.4 per cent drop in prices in April, smaller than March’s drop.
Land Registry data for March, which includes transactions that may have happened up to three months earlier, also showed a smaller 0.4 per cent drop.
Meanwhile last week the Royal Institution of Chartered Surveyors reported that inquiries from potential buyers were at their best for nearly 10 years and the Council of Mortgage Lenders said the number of new mortgages had jumped by 29 per cent between February and March.
However, most economists foresee house prices falling much further as the economy continues to weaken and unemployment continues to surge. In the housing slump of the late 1980s and early 1990s, for example, prices fell for four years.