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Asking prices have risen says Rightmove

Asking prices have risen says Rightmove

Monday, 18 May 2009 12:09 PM

Asking prices rose 2.4 per cent in the last month - the largest increase in six years - according to data from Rightmove.

The rise in asking prices was attributed to sellers being "driven by a mixture of ambition, optimism and necessity", pushing the average asking price for May to £227,441.

However, Rightmove also noted the lowest number of sellers coming into the market for six years, saying "many prospective sellers have become effectively immobile due to insufficient equity to fund their move".

Miles Shipside, commercial director at Rightmove said: "The long-term worry is that the supply side of the housing market is now compromised for several years to come.

"Developers have shed much of their workforce so could struggle to increase capacity, and we are now seeing the lowest number of new sellers of second hand homes for the month of May since 2003. Many people who might have wanted to take advantage of the spring selling season to trade up will be victims of equity immobility.

"The choice of when and how to move is now out of their hands. While some of the impetus behind the increase of over £5,000 in average asking prices will be due to ambition or optimism, it will also be out of necessity as new sellers attempt to scrape together enough equity to move."

Seasonally adjusted figures from the Halifax and Nationwide were less optimistic, although government statistics on house prices released last week did show that the house price decline seen in recent months was slowing.

Rightmove's news on first-time buyers was positive, showing that prospective buyers with nothing to sell were increasingly active, "encouraged" by the general decline in asking prices.

However, some commentators have warned recent optimism could lead to a house price 'dead cat bounce' in the summer.