Seller confidence returns despite poor lending approval levels

Confidence in the housing market is returning, according to the monthly house price index (HPI) from Rightmove released today.

The HPI recorded a 13 per cent increase in new sellers returning to the market, with asking prices seeing their largest rise for 14 months.

But Rightmove warned against any interpretation of early signs of recovery, which they said must be in the context of mortgage approvals, which currently stand at a third of recent levels.

Miles Shipside, commercial director of Rightmove said: "My view is that many sellers are still starting too high, but the fact that they are coming to the market in greater numbers and feel they can ask more shows a strengthening in resolve and confidence, which is an encouraging sign.

"It looks like we are now bumping along the bottom of the trough, but for there to be any real sense of optimism that we’re on a sustainable road to recovery, the availability of mortgage finance needs to improve significantly, given that mortgage activity is currently running at around a third of its average levels between 2002 and 2007."

Asking prices were raised by an average of 1.8 per cent, £3,996, although estate agents reported prices actually being achieved were around 25 per cent below their peak prices. Average stock for estate agents rose a small amount, although properties on their books still remain at historically low levels.

The average property asking price for April was £222,077, up from £218,081 in March. All areas saw asking prices rise, except for Greater London, where a fall of 3.2 per cent was seen. Worst performing area was Ealing, with prices down 7.8 per cent month on month.

Mr Shipside added: "The best advice for sellers is to price lower at the outset to tempt buyers right away, rather than having to go through months of frustration and the desperation of a major price slash."