Property asking prices near three-year high

Published 17th May 2011

Asking prices for houses in England and Wales have risen this month to their highest in nearly three years, despite a lack of support from market fundamentals, property website Rightmove said on Monday.

Rightmove said the average asking price for property marketed via its website was now 238,874 pounds -- the highest since June 2008 and just off the all-time peak of 242,500 pounds reached in May 2008.

Prices in May are 0.7 percent higher than a year earlier, compared to the 0.1 percent annual increase seen in April.

Adjusted for inflation, prices are still 10 percent below their 2008 peak, and Rightmove said they were being artificially supported by the Bank of England's record low 0.5 percent base rate, which has staved off repossessions.

"With such low transaction volumes, asking prices do not necessarily reflect the market fundamentals, so continuing demand for good quality property in better areas and a lack of pressure to sell have enabled prices to appear to defy gravity," said Rightmove director Miles Shipside.

"Base rates of 0.5 percent and continuing lack of mortgage availability are enabling the housing market to stay in its 'low transaction limbo', with few forced sellers driving prices down and few genuinely proceedable buyers."

Average asking prices in London -- which benefit from overseas demand and cash-rich buyers who work in the finance industry -- hit a record high of 431,013 pounds in April, and slipped fractionally to 430,936 pounds in May.

Source: ' Reuters '

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