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British house prices increased in September on rising confidence and dwindling stock of property, results of a closely watched survey showed Monday.
Average asking prices were up 0.6% in September from August as autumn sellers raised price expectations, the property website Rightmove reported. House prices had declined 2.2% in August after rising 0.6% in July.
Currently, the average property asking price is GBP 223,996. Year-on-year, house prices dropped at a slower pace of 1.5% in September compared to a 3.1% fall in August.
Rightmove recorded the lowest average stock levels per branch for 18 months, with 29% more properties coming off the market than coming to the market.
With 151,591 properties measured as coming off the market this month, it indicates why property scarcity in popular areas is underpinning price levels, Rightmove said. This trend is clearly evident in the south of the nation.
According to the property website, would-be sellers were deterred from trading up by dwindling property choice and high deposit requirements. With choice getting increasingly limited in popular areas, they need to have a buyer lined up to improve their chances of securing their next home.
The recession hit prices harder in the north and it was compounded by conservative attitude of lenders. "Lenders quite naturally prefer to lend to lower risk borrowers in better locations, with better job security, larger deposits and more resilient property values," Miles Shipside, commercial director of Rightmove said.
He expects many of the aspiring sellers to be trapped in their homes until house prices increase enough for them to join the equity-rich club. But, even then they would be heavily dependent on the number of bottom-of-the-chain first-time-buyers.
There are lots of positive signals like rising confidence, lower stock and increasing number of people searching houses, but too few buyers can put down the 40% deposits that are needed in order to secure the best mortgage deals, said Shipside.
Further, he said, "Frustrated homehunters should note the expected ten year timetable to wind up Lehman Brothers, giving a clear indication of the time required to rebuild the banking system."
On September 15, the Royal Institution of Chartered Surveyors said a majority of real estate agents reported that British house prices are rising rather than falling, for the first time in two years. The London-based agency said the number of respondents surveyed saying house prices rose in August exceeded those reporting declines by 10.7%.
The Ernst & Young Item Club earlier assessed that the recent increase in British house prices reflect acute shortage of properties for sale. The current stabilization in the housing market is a false dawn, the think-tank warned.
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