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Increased interest from buyers pushes British home prices to 5-year high

Rising interest from buyers pushes up asking prices; first-time buyers still struggling, though

PUBLISHED : Wednesday, 20 February, 2013, 12:00am
UPDATED : Wednesday, 20 February, 2013, 4:40am

British home sellers raised asking prices to their highest levels in five years in February as inquiries from potential buyers increased, property listing giant Rightmove said.

Prices sought rose 2.8 per cent from January to £235,741 (HK$2.82 million), the website operator said in a report published this week. They increased 1.1 per cent from a year earlier. In London, prices gained 1.2 per cent, the smallest increase for a February in four years.

"Some agents are reporting their busiest new year since the onset of the credit crunch," Miles Shipside, director at Rightmove, said. "While encouraging, it's far too early to pop the champagne corks as certain sectors will remain on ice until the return of wider-spread mortgage availability."

While recent house-price data has been mixed, credit-boosting measures such as the Bank of England's funding for lending scheme have helped increase mortgage availability and reinvigorate the property market. The central bank last week forecast a "slow but sustained recovery" for Britain, although it said high inflation would continue to squeeze households.

Housing market activity had been boosted by new properties being put up for sale after a dearth of transactions over Christmas, Rightmove said.

In London, while the average asking price reached a record £486,890, the pace of increases is slowing, gaining only 0.7 per cent from three months ago. Asking prices in the capital were up 8.4 per cent from a year earlier.

First-time buyers were still struggling to buy homes, with almost half of people purchasing for at least the third time, Rightmove said. By contrast, only 22 per cent of people intending to buy a home this year would be first-timers.