Smallest gain in UK March property asking prices

More restrained pricing in some areas due to buyers having more choice

UK home sellers raised asking prices by the smallest amount for March on record as the supply of available properties increased, Rightmove plc said.

The average house price in England and Wales climbed 0.1 per cent from February to £229,614 (S$483,222), the smallest increase for the month since data began in 2002, the owner of the UK’s biggest property website said in a statement yesterday. Prices in London dropped 2.5 per cent.

Britain’s housing market continues to be a ‘challenging’ environment, Bovis Homes Group plc, the smallest publicly traded UK homebuilder by volume, said last week. While the economy has exited recession, Bank of England officials said that they may expand their £200 billion bond purchase programme if they need to sustain the recovery.

‘In some areas, more restrained pricing is required as a direct consequence of buyers having more choice,’ Miles Shipside, commercial director of Rightmove, said in the statement. ‘The small increase in March shows how much more unpredictable the market has become. We still forecast some further rises in the first half of this year when buyers have picked over the newly marketed stock.’

The gain across the UK this month compares with the 1.3 per cent average increase for March from 2002 to 2009, Rightmove said. Asking price gains slowed from last month’s 3.2 per cent advance, the biggest since April 2007. The report shows that asking prices rose 6.1 per cent from a year earlier.

The number of properties put on the market rose by a third from a year ago, and is up 18 per cent from February, Rightmove said. The average time on the market fell to 63 days, the lowest for March on record, from 84.

The North led gains among the seven of 10 regions tracked by Rightmove, with a 6.6 per cent increase on the month. London and East Anglia fell the most, dropping 2.5 per cent each.

Kingston-upon- Thames’s 5.9 per cent drop led declines in the capital, followed by a 5.7 per cent decrease in Westminster.

‘With the backdrop of the UK housing market continuing to be challenging,’ 2009 performance ‘leaves the Group well placed to deliver profitable growth looking ahead,’ Bovis Homes said in a statement on March 8. The Longfield-based company reported annual profit of £3.49 million, compared to a £59 million loss a year earlier.

A lack of credit is limiting demand for new property and may be undermining the housing market recovery. Mortgage approvals fell to 48,198 in January, the lowest in eight months.

Bank of England policymaker Kate Barker said that UK borrowers may face higher loan costs for a while. There will be a ‘protracted period where credit is more expensive while there is pain from the public finance side’, the Western Morning News reported on March 13, citing an interview.

House prices climbed for the first time in five months in March, gaining 0.1 per cent to £217,006, according to a separate report released yesterday by website FindaProperty. com. This month’s reading is based on 237,000 transactions tracked by the company.

Policymakers kept the key interest rate at a record low of 0.5 per cent this month after the economy expanded 0.3 per cent in the last three months of 2009, ending the recession at six quarters.

Source: Business Times, 16 Mar 2010