Rightmove: House prices up 0.8%

Tuesday, 25 March 2008 12:00 AM

The average asking price for a property in England and Wales increased by some 0.8 per cent during March, according to the latest research from property portal Rightmove.co.uk.

However, although this growth was significant in a stagnating market, the figure was lower than growth recorded in March 2007.

As a result, annual asking price increases fell back to five per cent during the month, down from the 5.8 per cent in February.

The average asking price for a property in England and Wales is now £239,655 according to the research.

Detached properties remain the most expensive, with average asking prices up 4.1 per cent over the last year to £340,632, while semi-detached homes saw a three per cent increase to £207,141.

Terraced properties saw an annual increase of five per cent in prices to £186,797, with flats up four per cent to £199,912.

According to Rightmove, the recorded increase in asking prices was caused by new sellers arriving on the market with unrealistic expectations with regard to achievable prices.

"Most sellers coming to the market seem to be ignoring the increased competition from other unsold properties and the challenge buyers now face in obtaining a mortgage," explained Miles Shipside, commercial director of Rightmove.

"As many of these sellers are likely to be buyers themselves, they seem to be trying to bank a higher figure for their home but want a bargain when they buy. It's human nature, but in the current market, sellers should price below their competition to achieve more interest now and avoid a larger price drop later in the year."

Estate agents are completing fewer sales and are seeing stock levels increase.

Average unsold property stock per branch has risen to 67 from 56 at this time a year ago (and from 64 last month), evidence of the slower rate of sales and giving credence to Rightmove's forecast that completed transactions will be under a million this year.

However, prices are unlikely to see the dramatic falls witnessed in the USA.

The cost of providing a home information pack (Hip) and uncertain conditions in the market are discouraging new sellers from offering property. In addition, there have been sharp cutbacks in the number of new homes being built.

These have both restricted supply and ensured prices have remained stable.

Finally, over the past month, time on the market has seen a substantial drop to 82 days from 93.

While this is to be expected at this time of year due to more sales than in the quieter winter months, this reduction shows there is a positive base of activity in the market if you are willing to price intelligently, argues Rightmove.

"The challenge to sellers is to get smart and accept this new reality. The best price sellers can achieve has fallen - though they won't lose out if they are then planning on buying as well," concluded Mr Shipside.

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