UK home sellers raised asking prices by the largest amount for April in three years as demand outstripped the supply of desirable properties for sale, Rightmove plc said.
The average house price in England and Wales climbed 2.6 per cent from March to £235,512 (S$495,558), the owner of the UK’s biggest property website said in an e-mailed statement yesterday. Prices in London rose 1 per cent.
The report suggests Britain’s housing market recovery is keeping up momentum before the May 6 election, which Prime Minister Gordon Brown is fighting on his record at managing the economy. Prices may still weaken as more homeowners try to sell later this year, Rightmove said.
‘We forecast overall property supply will continue to rise,’ Miles Shipside, commercial director of Rightmove, said in the statement. ‘If asking prices continue to rise, all but the most popular locations are building themselves up for some of the gains to be lost later in the year.’
Asking-price gains accelerated from last month’s 0.1 per cent advance, which was the smallest gain for March on record since data began in 2002. The report shows asking prices were 6 per cent higher in April than a year earlier.
The current monthly pace of properties coming on the market has now rebounded to levels seen before the collapse of Lehman Brothers Holdings Inc in September 2008 at the height of the global financial crisis, Rightmove said. The average number of unsold properties per real-estate agent in April rose to 68 from 65 the previous month.
East Anglia led gains among the nine of 10 regions tracked by Rightmove showing increases, at 4.9 per cent on the month.
In London, prices rose in every district from a year earlier for the first time in two years.
To calculate the data, Rightmove measured the asking price for 129,898 properties put on sale by estate agents between March 7 and April 10, or about 90 per cent of the market.
A separate report yesterday by the Council of Mortgage Lenders showed lending for house purchase strengthened in March. Mortgage lending rose 24 per cent from February to £11.5 billion, the CML said in a statement on its website.
‘With the gradually improving economic backdrop and interest rates still low, we continue to expect a gentle improvement in market conditions later in the year,’ Paul Samter, an economist at the CML, said in the statement.
‘The longer-term problems facing the market remain and will limit the speed of recovery in the housing market and wider economy.’
While the economy emerged from recession in the last three months of 2009, posting growth of 0.4 per cent, Bank of England policy makers held the key interest rate at a record low of 0.5 per cent this month to keep up support for the recovery.
Gross domestic product data on April 23 will probably show the same pace of expansion in the first quarter, according to the median forecast of 31 economists in a Bloomberg News survey.
Recent reports have shown that doubt about the outcome of the election, an increase in transaction tax and winter weather undermined the housing-market rebound this year, which has seen prices rise after falling as much as a fifth from the 2007 peak.
Values may weaken if the vote replicates the latest opinion polls and doesn’t produce a clear winner, resulting in a so-called hung parliament, Savills plc said on April 9.
The opposition Conservatives had 35 per cent support, compared with 28 per cent for Brown’s Labour Party and 24 per cent for the Liberal Democrats, in a ComRes Ltd poll published on April 16.
‘As far as the housing market is concerned, any election result is better than no result,’ Rightmove’s Mr Shipside said. ‘In the event of a hung parliament, the market is likely to go into suspended animation until greater certainty emerges.’
Source: Business Times, 20 Apr 2010