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Housing market sees ‘surprisngly strong’ bounce as prices rise
THE housing market has seen a “surprisingly strong” spring bounce after sellers upped their asking prices by the highest monthly jump for a decade.
The 4.1 per cent month-on-month leap is the biggest recorded since 2002, with new sellers typically asking £233,252 for their homes, according to a survey from property website Rightmove.
The “surprisingly strong spring price pump” could have been triggered by rising seller confidence due to a lack of homes for sale in more affluent areas boosting buyer demand, the study said.
London asking prices, at £449,252, are within one per cent of last October’s all-time high, but the number of new listings is down by nine per cent on February 2011, indicating seller shortages will help push up prices in the capital this year.
Rightmove suggested the market generally has taken on a new “strange normality” of low sales volumes but relatively stable prices.
Director Miles Shipside said: “We’re seeing a strong spring bounce in asking prices this year, but the ball is still a lot smaller than it was before the credit crunch.
“The biggest jump in new sellers’ asking prices for nearly 10 years indicates there is pricing power if you are selling the right type of property in the right place where enough potential buyers have access to funding.
“If your local market does not have those characteristics and your price pump is based on little more than seasonal optimism and an estate agent’s hot air, then be prepared for buyer response to be a let down.”
This month’s strong increase compares with monthly asking price rises of 4.5 per cent recorded in both February and April 2002. Since 2002, the biggest monthly uplift was 3.6 per cent in April 2007.
The study said that during the “pre-credit crunch norm”, the market would generally accept “spring bounce” asking-price hikes if this was matched by a seasonal increase in buyer activity and the finances were there to support it.
But a more uncertain picture has emerged with the UK fragmented into “micro markets”, each performing differently, and the strength of London sales boosted by overseas buyer demand has been at odds with much of the rest of the country.
Mr Shipside said there were indications that potential buyers are in a more “positive mindset” this year, with six out of 10 people in a recent study believing the market favours buyers.
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