UK property asking prices rise again in October - Rightmove

Source: Wall Street Journal Online
Published: 16 October 2011

LONDON (Dow Jones)--Asking prices for property for sale in the U.K. rose sharply in the first weeks of October compared with September, buoyed by higher demand for more expensive southern houses, a survey by Rightmove showed Monday.

According to Rightmove's latest index, which measures the price at which a property is advertised for sale and not the achieved price, house prices in mid-October jumped 2.8% on the month and were 1.2% higher from a year earlier.

That compares with a 0.7% monthly increase and a 1.5% annual gain in September.

However, Rightmove's director Miles Shipside said the headline increase masked a widening gap between the north and south of England.

Data from the Rightmove website show that house prices in southern England rose 4.7% on the month in October an average price of GBP336,743 while in northern England regions the average asking price for property fell 0.7% to an average asking price of GBP164,347.

The gap between the two regions is now wider than it has ever been, according to Rightmove statistics.

"Wider access to mortgages and rising asking prices are early signs of increasing demand," Shipside said. "However, the reality is that there is further evidence of the two-tier twist which is dogging the return of more widespread liquidity in the housing market."

While the Rightmove survey reports a further increase in asking prices for U.K. residential property, other surveys are reporting stagnation in the actual achieved selling price of property.

But, as all current surveys suggest, throughout England and Wales, activity remains well below the levels recorded before the beginning of the global credit crunch in 2007.

And while there has been an increase in mortgage approvals, there are growing concerns that the longer the euro-zone debt crisis rumbles on for, the more likely there could be a renewed tightening of mortgage lending criteria as banks struggle to secure funding at a good rate of interest on the international money markets.

Other details from the Rightmove survey show that the average number of properties for sale per estate agency held steady in September from August at 78. And, the average time to sell a property was only little changed at about 91 days in October from about 92 in September.

Rightmove measured 98,402 asking prices of properties put on sale by estate agents between Sept. 11 and Oct. 8, which Rightmove estimates represents about 90% of the total number of residential property advertised for sale over that period.