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Housing market is boosted by price rises

House prices jumped by 1.2% during the first week of January as confident new sellers hiked their asking prices, research has revealed.

The steep rise in asking prices during the early days of 2010 helped the average cost of a home on the market in England and Wales increase by 0.4% during the five weeks to January 9 to £222,261.

Property website Rightmove said the housing market had got off to a “buoyant start” this year, as record numbers of people logged on to its website to view property, with volumes up 26% compared with the same period of 2009. It also estimates that the stock of homes for sale is currently at its lowest level this century, suggesting that the mismatch between supply and demand will continue to push up prices.

The latest increase, which followed two months during which the cost of property had fallen, left the average asking price 4.1% higher than at the beginning of January 2009.

Miles Shipside, commercial |director of Rightmove, said: “This rise in asking prices is an early indicator that new sellers in 2010 have the confidence to try for a higher price, as the index was lined up for a fall until the turn of the year.

“We were expecting a drop of about 1% as the majority of this month's index falls in December, but the optimism of those early January sellers flipped it around.”

The group said the factors that led to the unexpected buoyancy in the housing market during 2009 were continuing.

The average estate agency branch now has just 63 properties on its books, the lowest level since January 2008. But the group said the overall number of homes for sale was likely to be far lower than two years ago, as many estate agency branches had closed during the period.

At the same time, there are “drastically fewer” new-build properties coming on to the market after developers mothballed sites during late 2008 and early 2009.

Rightmove said only 50,624 properties were put on to its site during the five weeks to January 9, well down on the average of 89,000 during the same period of 2006 and 2007.

Overall, it estimates that the current level of homes for sale is at its lowest since it started to monitor the market in 2000.

Belfast Telegraph