New property instructions coming to market have seen vendors raise the average asking price by 4.1%

The average property asking price for new instructions put on the market within the last 4 weeks is now £233,252.

The almost £11,000 increase is up from January’s average asking price of £224,060, despite a warning that much of the residential property stock already on the market in some parts of the UK, is “over-priced and unsaleable”.

Rightmove have described the highest monthly increase since April 2002, the biggest rise in UK property asking prices for nearly ten years as “a surprisingly strong uplift given the challenging economic environment”.

But it said that the rise is partly fuelled by cash-rich sectors of the market, where buyer demand is exceeding suitable property supply.

Director Miles Shipside warned property vendors: “There is pricing power if you are selling the right type of property in the right place, where enough potential buyers have access to funding. But if your local market does not have those characteristics and your price-pump is based on little more than seasonal optimism and an estate agent’s hot air, then be prepared for buyer response to be a let-down.”

He added: “In some micro-markets, sellers have the upper hand, but on the whole, a buyer with cash or a mortgage offer is the one in the driving seat.”

After depressed activity in the UK property market over the last four years, some households have decided they had to get on and move. This means that here could be a growing acceptance by the British public that the state of today’s housing market is the new norm.

Mr Shipside said: “Search activity on Rightmove is up by 19% on January 2011 and it could be a sign that some of those who can afford to move have decided to get on with their lives, driven either by desperation or by coming to terms with the constant barrage of negative economic news being the new norm. You can get tired of gloomy news or get used to it, and indeed for some cash-rich buyers, life has moved on to such an extent that it’s like the Lehman Brothers collapse never happened. Stock levels are still on the high side in some less active parts of the country, but much of that stock is perhaps over-priced and unsaleable. However, in some micro-markets, the shortage of existing and new instructions has helped contribute to the largest monthly jump in new selling asking prices for nearly a decade. While the mass-market stays at home, those that have access to funding continue to be active and have spending power, resulting in this month’s big price hike.”

Average weekly listings on Rightmove are currently 30% below 2007 (pre-credit crunch levels), with a weekly run rate of 24,406 new listings.

Rightmove’s current asking price of £233,252 appears to be £70,000 ahead of current actual property selling prices, when compared with the selling prices currently being reported by Halifax and Nationwide of £160,907 and £162,228 respectively.

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