The Rightmove House Price Index for June shows that for the third consecutive month the price of new property coming to the market rose, fuelled by price records in London and the South East. The national average asking price for June is £246,235. This is an increase of 1% over the last month.
Miles Shipside, Director at Rightmove comments:
“While the national average price of property coming to market has set new records in each of the last three months, sellers should not break out the bunting in celebration until they have done their homework. It remains a very local market ruled by property style and location. Agents report a two-tier market where those who can afford to price realistically are selling, while those who are equity poor are struggling to sell as they often have to price up to make any prospect of a move viable. The traditionally more active spring window is closing and a summer of sporting distractions underway.”
There are still regional disparities. Record new seller prices have been set in two of the four regions in the south of the country, London and the South East. The asking price in London rose by 1.7% in the last month.
Miles Shipside adds:
“These strong rises in the south of the country have helped push the national average asking price into new record territory. In these uncertain economic times, lenders feel safer to lend to those with a cash-cushion, and those sitting on that cash often feel more comfortable with it invested in tangible assets, including bricks and mortar. The better properties in the better areas remain in short supply, giving sellers of sought-after stock, and their agents, the confidence to come to market at a higher price. The right property within commuting or holiday bolt-hole distance of the capital seems to be an attractive each-way bet with the potential to be both recession-proof and offer good odds to keep pace with, or even outstrip, inflation.”
Although prices have risen, it has not kept up with inflation. Property coming to market in June is more than 13% cheaper in real terms than in August 2007. Greater London is the only region that has seen the asking price rise above inflation.
With the Eurozone crisis continuing, and no sign of economic stability in the short term, it is unlikely that these record prices can be maintained.
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