UK House Prices Log First Annual Rise Since June 2008: Rightmove

Sponsored Links

UK home sellers raised their average asking prices in October for the first time since June 2008, on an annual basis, a closely watched report revealed Monday.

House prices rose 0.2% year-on-year in October after falling 1.5% in September, with the average property asking price at GBP 230,184, up from last month's GBP 223,996, property web site Rightmove said. That was the first increase in fifteen months, led by a strong recovery in London. In the capital, house prices were 0.8% above their peak of November 2007 and 5.2% higher over the previous year due to property shortages and increased buyer demand.

"London generally leads the country out of property recessions, as underlying demand remains strong, " said Miles Shipside, commercial director of Rightmove. "With prices lower due to the financial jitters in the City, combined with the weakness of the pound, foreign buyers are on a shopping spree."

On a monthly basis, national house prices rose 2.8% in October after rising 0.6% in September, the biggest rise measured in any month since February 2008 and the largest rise seen during October in six years. Rightmove said it was a highly unusual time of the year to see such a strong sellers' market emerge, especially given the current economic backdrop.

On a monthly basis, house prices in London grew 6.5% to a record GBP 416,157. Prices gained everywhere except in North and East Anglia.

Other recent house price indexes also suggested increase in prices, of which the Nationwide house price index grew for the fifth month in September. A survey by the Royal Institute of Chartered Surveyors also indicated that the housing market is gaining strength.

The Rightmove said the current price recovery is based on an unusually thin market with transaction levels still 54% down on 2007. Ongoing lack of supply is driven by home owners deciding not to move given the current economic backdrop.

Rightmove's latest consumer confidence survey, to be released at the end of this month, is likely to provide further evidence of the improvement in buyer sentiment. According to the property web site, analysis to date shows that only 1 in 10 of over 30,000 respondents believes prices will be lower one year out, a massive turnaround from the beginning of the year when nearly 7 in 10 were of that opinion. Indeed, more than half expect prices to be higher, rather than just leveling off. However, this positive picture is hiding some fundamental weaknesses in the current housing market. Shipside said sellers in popular areas are back in the driving seat, though they should watch out for icy conditions ahead, as the market is likely to enter a pre-election freeze by spring next year. Political uncertainty can cause a period of slower activity in the housing market.

UK home sellers raised their average asking prices in October for the first time since June 2008, on an annual basis, a closely watched report revealed Monday. (Market News Provided by RTTNews)