The Rightmove House Price Index for April has been released today. It shows that the average property asking price rose 2.9% last month to £243,737. This is a yearly increase of 3.4%. This is a new record, beating that set in May 2008 by £1,327 (0.5%).
This national average does mask a north-south divide however. Asking prices in London rose 7.9% over the last year but those in the North-West fell by 1.2%.
Director of Rightmove, Miles Shipside comments:
“The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the south and London in particular. It’s a somewhat perverse state of affairs for many of the mass-market not deemed as mortgage-worthy by the lenders that, at a time when many aspiring buyers are excluded, the national average price of property coming to the market is at an all-time high.”
Compared to previous price highs, London and the South West recorded new records in April. The average property price in London is now 2.1% higher than the previous price peak in March 2012. In the South West the property price breaks the record previously set in May 2008 by 2.3%, with prices currently averaging £270,735.
Of the regions Wales has recorded the biggest drop from record price levels. The average price in August 2007 was £188,113. It has since fallen by 12.3% to £164,943. Yorkshire and Humberside and the East Midlands also recorded falls of over 10% from their peaks (-11.6% and -10.3% respectively).
Miles Shipside comments:
“Those deciding to sell in the south are looking a lot more confident in their pricing power than their more nervy northern counter-parts. While there are still micro-market hotspots in the north, there are more negative elements to add in to their moving equation, such as employment prospects and lack of equity. Such factors can undermine, or scupper, prospective buyers’ ability and confidence to buy at inflated prices. More potential buyers in the south have the virtuous circle benefits of less economic stress, greater access to equity making them more appealing to lenders, and consequently more confidence to pay higher prices.”
Part of the reason why London may be able to record such price rises is because less property is coming onto the market. The two areas recording record house prices this month also had falls in the average number of properties coming to market. London showed a 5% fall in fresh property supply. The South West region records a 5.5% fall in fresh property supply compared to April 2011. Nationally, 0.5% fewer properties were put on the market compared to last year.
Miles Shipside added:
“Fresh property stock is a bit scarcer this April compared to last, and this is a key factor in providing a price floor for spring prices to springboard from. This is the strongest price-bounce Rightmove has ever recorded for the first four months of the year. New sellers are setting price records in the fresh-stock-starved London and South West regions, and agents report this is also the case in micro-markets in other regions where a shortage of fresh stock is coinciding with the traditionally more active spring market. However, local market conditions vary considerably. Buyers scour the market looking for the best value, and can easily spot properties that are out of line. The tightening of the stamp duty noose will cause some price machinations, especially for the higher priced thresholds where the tax-take really starts to bite.”
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