Average asking prices up 2.4%, says property site
A mixture of “ambition, optimism and necessity” on the part of sellers has driven a surprise jump in asking prices for properties this month, with the average price up 2.4%, according to property website Rightmove.
The group said the average asking price of property in England and Wales rose to £227,441 in May from £222,077 in April.
This was the largest percentage rise in May for six years.
However it said the jump over the past month, which still leaves asking prices 6.2% down on the year, also reflects the scarcity of property coming to market.
“Sellers may be pricing at this level because they fear that their equity could be eroded to danger levels where they can't find an affordable mortgage deal on their new purchase, due to lenders' stricter loan-to-value ratios,” it added.
Rightmove reports prospective buyers with nothing to sell are increasingly active, hence the mismatch between supply and demand. Miles Shipside, commercial director at Rightmove, said: “Equity-poor home owners are either not coming to market or are having to price too high.”
The Rightmove index only measures the asking price, rather than the selling price achieved when a house is sold.
Its index has often registered more optimistic readings than the more definitive measurements published by the Nationwide, Halifax and the Department for Communities and Local Government. Economists point to the relative thinness of the current market.
The rises in the Rightmove indicator do confirm some optimism in the world of real estate. Surveys by the Royal Institution of Chartered Surveyors suggest new-buyer interest has revived after its low point last winter.
The Bank of England and the Council of Mortgage Lenders also confirm a rise in mortgage approvals, though these are still well down on past levels and not sufficient to prevent prices falling further this year.