The average house asking price has risen to a new record high – but remains well below the 2007 peak once inflation is taken into account, a study said today.
The price of a home coming to market rose by 1 per cent month-on-month in June to reach ?246,235 on average, but London is the only region where prices have outpaced inflation over the past five years, the Rightmove house price index found.
Nearly 30,000 new sellers a week came to market in the three weeks before the Diamond Jubilee weekend, the highest rate of new listings for nearly two years, suggesting asking price increases will slow down as seller competition intensifies, the study said.
Going up: House asking prices have risen to a new record high, to ?246,235 but they remain well below their 2007 peak once inflation is taken into account according to a new Rightmove studyElections in Greece and the eurozone turmoil, as well as this summer’s sporting events such as Euro 2012 and Olympics are likely to dampen house sales further, with buyers more interested in viewing sport than property, the study said.
Asking prices have risen to new record highs for the past three months in a row. But while sellers’ prices are up by two per cent on August 2007, just before the economy faced the run on Northern Rock, they have fallen by 13 per cent in real terms after retail prices index (RPI) inflation is taken into account.
London is the only region in the study covering England and Wales to record an inflation-busting increase in asking prices, which stand at a new high for the capital of ?477,440. Prices there have increased by 3 per cent after inflation since August 2007.
Prices in the South East also hit a new high of ?318,717, although prices in the region are 11 per cent below those in August 2007 in real terms.
Trend: A graph showing how monthly asking prices have risen and fallen in a year. The plunged at the end of last year to around ?220,000 before rising quite dramatically in the last six months to ?246,000
Ups and downs: A map showing how average asking prices in different regions of England and Wales have risen and fallen from May to June this year. In London prices are up 1.7 per cent from ?469, 314 in MayAsking prices have plummeted furthest in real terms in Wales, where they stand at ?167,875, a sharp 24 per cent fall since August 2007.
Rightmove director Miles Shipside said: ‘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.’
Mr Shipside said that from a seller perspective, most are still worse off in real terms than they would have been selling five years ago.
Record high: The price of a home coming to market rose by one per cent month-on-month in June to reach ?246,235 on average
Meanwhile, the reduction in house prices in real terms would have been great news for buyers only if their wages had kept pace with inflation, he said.
Mr Shipside added: ‘The reality is wage freezes, rising costs of living, and continuing tight mortgage funding have squeezed affordability for many buyers.’
A string of lenders have recently raised their mortgage borrowing rates and many have also tightened their credit criteria amid the weak economy and eurozone uncertainty, making it tougher for people to take out a mortgage.
Mr Shipside said that the ‘late spring rush’ of new sellers coming to market had come just before the traditional summer slowdown when buyers tend to be more scarce.
He said: ‘With the likelihood of the Greek election outcome causing further economic uncertainty, and buyers more interested in viewing sport rather than property, it is likely we have seen the last of record asking prices for the remainder of 2012.’
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