Rightmove has reported that April has seen a 2.1% (+£4,996) rise in new seller asking prices, the fourth successive monthly increase this year.
June 2012 saw the highest ever asking price of £246,235, and this month’s average asking price is just £1,529 shy at £244,706.
The average price of a property coming to market is up by 6.9% (+£15,717) so far this year.
Miles Shipside, director and housing market analyst at Rightmove, said that transaction volumes may be historically low but, paradoxically, new seller asking prices are within a grand and a half of a new record high.
“With mass-market buyers still sitting on the sidelines, the size of the active market is a lot smaller, making it easier for an upswing in activity to feed through to an upturn in prices. With London prices pausing for breath this month but likely to bounce back next, May looks like an odds-on bet to deliver a new asking price record. This should not be confused with an overall market recovery, as while spring may be here the ongoing chill of the recession is still in the air. However, it is true to say that more estate agents are reporting more activity in more segments of the market.”
Rightmove said that the weekly run-rate of properties coming to market this month, even excluding the abnormally low listings seen during Easter week, was 28,179, down 4% on April last year. With average time on the market down from 83 days in April last year to 73 days this year, there is evidence that growing demand in the market is not being matched by the supply of new properties coming up for sale.
Those who are only buying react more quickly to improving market conditions than those contemplating both selling and buying. The resulting mismatch in timing adds to upwards price pressure as more buyers compete for fewer fresh properties.
Shipside said: “In theory, the combination of more buyer activity and a greater willingness of lenders to lend should whet the appetite of those potential sellers who have been steadfastly stuck in the stalls in recent years.
“The Funding for Lending initiative looks to have led more buyers to quench their thirst for property, though it looks like sellers need a little more encouragement before they decide to test the water and bring their property to market. The result is a degree of upwards price pressure in some locations and market segments, benefitting those sellers who have taken the plunge, and in time will encourage more to follow. While recent mortgage lending data from the Bank of England seemed to indicate no pick up in mortgage approvals in February, recent soundings from surveyors is that they are busy now.
“January and February were perhaps spent priming the pump, and we expect mortgage approvals to rise as more are tempted by the cheap borrowing on offer.”