Property boom: Largest ever rise in new sellers' asking prices recorded
Published by Max Salsbury for 24dash.com in Housing and also in Finance
For sale sign
New sellers' asking prices are up by an average of 3.6% (+£9,409) this month - the largest ever rise recorded at this time of year and another new all-time high.
According to Rightmove's house price index, the price of property coming to market is now 8.9% higher than a year ago.
The soaring prices represent the highest annual rate since October 2007's +10.4%.
The average asking price in London is up by nearly £80,000 so far in 2014, or £4,500 a week. Meanwhile, outside of the capital, the national average is £1,500 a week.
The figures come in the wake of Bank of England governor Mark Carney's weekend warning that the housing market represents the greatest risk to the UK's economic recovery.
During an interview with Sky News yesterday, Mr Carney said he was concerned that yet another "big debt overhang" was building up.
Though he said the BoE was monitoring the situation there wasn't much it could do about the "deep, deep structural problems" in the housing market.
Mr Carney blamed the problem on a lack of new homes. He said: "There are half as many people in Canada as in the UK, but twice as many houses are built in Canada every year than in UK."
Meanwhile, Rightmove's stats show that national average price for a home is now £272,003 - a record.
Miles Shipside, Rightmove director and housing market analyst, said: “May is a traditionally bullish price rise month, though this year’s 3.6% jump beats the previous May high of 3.2% set in 2002.
"A late Easter in the heart of the house-hunting season has not only concertinaed the traditional hottest home-moving period by several weeks, but also stagnated seller numbers, further stirring up prices in areas of buoyant demand.”
Rightmove says that "demand for housing remains strong" with email enquiries to its agents up by nearly 20% so far this year.
However, echoing Mr Carney, the estate agent also warned that the supply of new properties to market is "still unable to keep pace with demand".
Mr Shipside said: “In spite of every region having average new seller asking prices higher than a year ago and it being the peak time of year to attract buyers, the lure of bank holiday breaks meant that fewer sellers marketed their properties this month compared to last.
"The lack of fresh choice will frustrate buyers and lessen their negotiating power in popular locations as pent-up demand continues to be released and more buyers have the confidence and ability to act after years of inactivity.”