UK asking prices rise for seventh month in a row

Rightmove estimates values will now climb 4pc this year as 'broader-based' recovery kicks in

PUBLISHED : Wednesday, 17 July, 2013, 12:00am
UPDATED : Wednesday, 17 July, 2013, 4:09am

British home sellers raised asking prices for a seventh month to a record in July, according to Rightmove, which said values would rise twice as much as previously forecast this year.

Prices sought rose 0.3 per cent to an average £253,658 (HK$2.97 million), the London-based property website operator said.

Rightmove forecasts values will now climb 4 per cent this year instead of 2 per cent.

Asking prices in London were little changed at a record average of £515,379.

The report adds to signs that measures by the Bank of England and the government to ease the supply of credit are boosting demand for property just as the economy shows signs of strengthening.

Rightmove said the housing market was showing a "broader-based recovery".

"A combination of apparent economic stability internationally - or at least, less widely reported turmoil - and some signs of an economic upturn nationally mean more home movers are willing and able to increase their financial commitments," said Rightmove director Miles Shipside.

"Barring a raft of bad economic news, we expect the positive impact of this on the property market to continue."

From a year earlier, average prices in England and Wales were up 4.8 per cent, according to the report. In London, values surged 12 per cent in the past year. "It looks like London's sellers are pausing for breath," Shipside said. "It remains to be seen whether this is the start of the usual summer slowdown or whether the strength of buyer demand and the shortage of property supply will see prices rise again over the traditionally less racy summer selling season."

Similarly upbeat reports have come recently from Halifax, Hometrack and Nationwide Building Society, which all said that values rose in June.

A quarterly survey by mortgage lender Halifax last week showed Britons' confidence in the outlook for the property market rose last month.

More than half of respondents (52 per cent) predicted prices would advance, an increase of 7 percentage points from March, while 12 per cent saw decreases, Halifax said.

There has been a "partial unblocking of pent-up demand", Shipside said. "The ability to borrow is increasing as the Funding for Lending Scheme starts to really deliver, though it still favours those with better deposits."

Phil Tily, a managing director at IPD, said in the statement: "While central London continues to be the powerhouse of performance, it is the regional advances that are tipping the balance and leading to an overall improvement in values.

"As the UK economy slowly picks up, incrementally, so does property performance."