Rightmove: House prices virtually static

House prices rose just 0.2 per cent this month, an indication of this year's surge in house prices coming to an end, according to new research.

The report by property website Rightmove, shows the average national asking price rose by £526 in the last month.

The website says the lack of growth is down to the property market adjusting to increased home ownership costs, warning that a rise in interest rates would add "an additional and unnecessary burden" to affordability in the market.

The report also finds signs of a new trend of high prices and the increasing costs of home ownership affecting the ability of potential sellers to trade up, and consequently fewer properties are being put onto the market.

In the last month Rightmove recorded 123,000 properties being placed onto the property market, the lowest number of new instructions since January.

Miles Shipside of Rightmove comments: "Asking prices are at a virtual standstill. . . Sellers trading up have been sheltered from rising prices, as they were already on the property ladder.

"Now the price gap to the next rung has got even wider, some of those thinking of selling are delaying marketing until their own affordability improves. They are now in the same boat as many would be first-time buyers."

The report finds that the UK's buoyant economy means sellers can afford to wait for buyer affordability catch up with the high prices rather than drop their asking prices.

Mr Shipside concludes: "The pent up demand is there, both from first-time buyers and existing home owners looking to move. As they are stretched, they are forced to be choosy and look for the best value.

"Sellers should price competitively and offer less on the one they are buying, as it's often the only way to do deals in this market." XXX