House asking prices rise for third consecutive month

The average cost of a home put on the market in England and Wales during the four weeks to March 12 rose by 0.8% to £231,790, following a 3.1% increase in February, according to property website Rightmove.

The group says the rise reflected an increase in activity from potential buyers, as well as a shortage of properties coming onto the market, as many homeowners decided to sit tight.

Search activity on Rightmove's website hit record levels during three of the four weeks in February, and estate agents reported that the higher levels of enquiries and viewings seen in January and February were slowly converting into offers and sales.

More homes on the market

There was also a slight increase in the number of homes put up for sale during the month, with the amount of stock on estate agents' books rising by 5% year-on-year, although levels remained 26% below those seen before the credit crunch struck.

Rightmove says the low level of new listings pointed to an absence of both forced sellers and traditional mass market ones, as people were either unable or unwilling to trade up at the moment.

The average time a property is on the market for fell from 98 to 89 days during the month, while the number of unsold properties per estate agency branch edged up by just one to 70, a far smaller increase than is normal for the time of year.

The group says the muted rise in the number of unsold properties on estate agents' books suggested that the pace at which sales were being agreed had picked up to nearly cancel out the spring bounce in sellers.

Miles Shipside, director of Rightmove, says: "The spring bounce in buyer interest and slight pick-up in supply of fresh stock suggest that renewed activity in some sectors of the property market is managing to outweigh the impact of economic uncertainty and lack of mortgage funding."

But he adds that the large deposits that lenders are continuing to demand from buyers had led to greater market liquidity for more expensive properties, which tend to appeal to wealthier buyers, while people selling properties that appeal to first-time buyers, such as terraced homes, are continuing to struggle.

Regional variations

Asking prices increased in all areas of England and Wales during the month apart from London, where they dropped by 1.5%.

The South West saw the biggest jump, with asking prices rising by 3.3%, followed by the East Midlands at 2.8% and East Anglia at 2.2%.

Meanwhile, property website Zoopla.co.uk says house prices had hit an eight-month low, after dropping by 11.09% since July, wiping £26,240 off the value of a typical home.

The latest slide has left the average house costing £201,911, 18% below the peak of £247,505, reached in October 2007.

The group says the drop could create a buying opportunity for people who were able to get a mortgage.

On a regional basis, the North East has seen the biggest fall, with property values dropping by 14% since July, while the London market has proved the most resilient, with prices falling by only 7.59%, to be just 8.36% below their peak.

Nick Leeming, business development director at Zoopla.co.uk, says: "Whilst it has been a challenging period for the market over the past few months, the recent dip in prices and the notable variance between regions may have created some buying opportunities."

Further reading/Key links

Valuation Loophole: Free House Price Valuation Cut home loan debt: Free Remortgage Guide, Free Mortgage Guide Latest House Prices: Nationwide, Land Registry, Halifax