The FINANCIAL — U.K. home sellers raised asking prices in September, encouraged by growing demand amid a low supply of homes on the market as the autumn moving season gets under way, property website Rightmove said on September 21.
The average asking price rose 0.6 percent in September to 223,996 pounds ($366,100), after a 2.2 percent fall in August, as the lack of supply put upward pressure on the market, Reuters reported. Properties were coming off the market for every eight coming on, with would-be sellers deterred from trading up by dwindling property choice and high deposit requirements.
“Confidence is up, stock is down and the number of people searching is high,” Miles Shipside, commercial director at Rightmove, said in the statement, according to Bloomberg. “The recession appears to have hit prices harder in the north.”
The U.K. property market is showing signs of recovery as the country emerges from the worst recession in at least a generation, the same source gives information. The Bank of England this month kept the benchmark interest rate at 0.5 percent and maintained a program to buy bonds with newly created money to stimulate the economy.
A poll of potential movers by Rightmove revealed that more than half – 53% – owned around half of their existing house, Wales Online reported. The homes website said that trading-up, where buyers capitalise on a buoyant property market by moving to a more desirable district or dwelling, had now become the domain of the wealthy.
According to the same source, Shipside said: “Lenders quite naturally prefer to lend to lower risk borrowers in better locations, with better job security, larger deposits and more resilient property values. “Indeed it becomes a self-fulfilling prophecy, keeping the best areas more buoyant and making it harder for depressed areas to bounce back.”
Rightmove said the steady increase in mortgage finance had drawn more home buyers to the market while the amount of sellers remained at low levels, The Wall Street Journal reported. For every 10 properties sold, just eight new properties are being listed for sale, according to the survey.
The monthly increase in property prices is in line with other recent upbeat housing-market surveys, with economists citing the shortage of new property for sale as a contributing factor, the same source gives information.
According to Reuters, London was one of three regions which saw a month-on-month rise in house prices in August, although they remain 0.9 percent down on the year at 390,768 pounds.
Rightmove said evidence suggested activity in the property market was over dependent on those with substantial equity, and warned that lenders cherry-picking these buyers risked prolonging a thin market, the same source reported. 'Many aspiring sellers could face years trapped in their homes until values rise enough for them to join the equity-rich club,' Shipside added.
Surveyors reported more gains in home values than declines for the first time in two years, a report by the Royal Institution of Chartered Surveyors showed on Sept. 15, according to Bloomberg. A majority of Britons say now is a good time to buy a home, a survey by the Building Societies Association showed last week. The recession may also be easing for companies. An index showed 0.09 percent of U.K. companies failed in August, the lowest level this year, Experian Plc, the world’s biggest credit-checking company, said today in a separate report.
Unemployment is at the highest level since 1995 and central bank Governor Mervyn King said last week that joblessness will keep rising even after the economy starts growing again, the same source reported. Andrew Sentance, a Bank of England policy maker who said last week that the economy may be turning around more quickly than he had expected, will deliver a speech today in London. The next interest-rate decision is Oct. 8.
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