Surge in sellers slows house price growth - Rightmove

Property asking prices edged ahead by just 0.1% in March as large numbers of sellers returned to the market, figures showed today.

Housing website Rightmove said the £216 rise in average asking prices in England and Wales was the lowest it had ever recorded for March and compared with an average jump of 1.3% for the period during the previous eight years.

The group attributed the low figure to a surge in the number of people putting their property up for sale during the four weeks to March 6.

The number of properties on the market jumped by 17.5% compared with the previous month and 34% compared with the same period of 2009 to stand at its highest level for 18 months.

Rightmove said the steep increase in competition among sellers had given people less opportunity to increase their asking prices.

The rise in sellers, which is in line with figures recently reported by the Royal Institution of Chartered Surveyors, is likely to reduce the current upward pressure on house prices.

The mis-match between supply and demand has been a key factor in supporting the house price recovery, but many economists expect prices to resume their downward trend as more homes are put up for sale.

However, Rightmove pointed out that the virtual standstill in asking prices during the four weeks to March 6 followed a steep rise of 3.2% during the previous month.

It added that the surge in sellers was partly due to people holding off putting their home up for sale due to the freezing weather during the early part of the year.

Despite the muted price rise, there was a sharp fall in the length of time a property is on the market for, with this falling from an average of 84 days to just 63 days.

Miles Shipside, commercial director of Rightmove, said: "Snowbound sellers postponed their 2010 moving plans until the thaw, leading to the highest weekly average of properties coming to market since before the collapse of Lehman Brothers in September 2008.

"The majority of property price indices will show some further rises this spring, as they reflect the recovery from the weather-induced dampener on turn-of-the-year sales and subsequent mortgage activity."

All areas of England and Wales saw an increase in asking prices during the month, apart from London, East Anglia and the West Midlands.

However, the group warned that the monthly regional figures were currently very volatile.

On an annual basis, the North West has seen the biggest price increase during the past year at 8.7%, followed by the South East and South West, both at 7.4%.

Across the whole of England and Wales, asking prices are 5.3% higher than they were a year ago at £229,614.