Written by Gráinne Gilmore, Economics Correspondent for The Times
Property prices in England and Wales rose by nearly £1,500 this month while the number of sellers jumped by a fifth, boosting hopes that the housing market may be over the worst.
The average home is being put on the market with a price tag of £227,864, up from £226,436 in June, figures from Rightmove, the property website, show. This is the fifth rise in the past six months, prompting Rightmove to say that the market has already bottomed out.
Miles Shipside, commercial director of Rightmove, said: “There were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market. In most parts of the country, prices have consistently improved during spring.”
House prices plummeted by more than 20 per cent in the 18 months after the market peaked in autumn 2007, but many of the leading house-price surveys have registered rises in recent months.
The latest promising figures come only a week after new figures showed that the number of estate agents expecting house prices to increase in the coming months outnumbered those predicting further falls for the first time since May 2007.
As the rapid fall in house prices eased, activity in the market picked up as more bargain-hunters — confident that prices did not have much further to fall — joined the fray. In a further sign of the resurgence of the market, these bargain-hunters are now putting their own houses on the market, with Rightmove recording a 20 per cent increase in the number of houses for sale on its website.
“The increased confidence and activity is tempting more sellers to test the market as they seek to take advantage of the smaller price difference to trade up to a better home,” Mr Shipside said.
Estate agents recently sounded concerns that if there was a flood of new properties coming on to the market, prices could start to fall again as the competition between buyers eased.
Fears over unemployment, which recorded a record rise in figures in the three months to May, is also likely to hamper any full-scale recovery.
Rightmove said that it foresaw the market remaining stable for the rest of the year, with asking prices — which have already risen by 7 per cent so far this year — remaining flat as a lack of mortgage lending delays the recovery.
However, it said that if more lenders loosened their lending criteria, prices could rise by a further 5 per cent this year, taking the total annual gain to 12 per cent.
Rightmove also conceded that there could be a “double dip”, with asking prices falling by a further 10 per cent unemployment continuing to rise and the number of repossessed properties coming onto the market surging.
Recent figures showing trades in contracts based on future house prices suggested that investors believe house prices are set to fall further in the next 12 months, albeit at a slower pace. A gauge of future house prices, compiled by Tradition, the broker, showed that prices would fall by a further £1,932.
Rightmove pointed out that further falls in house prices could present a silver lining for buyers. “This would give a further window of opportunity for bargain-hunters who missed out on the best buys last winter,” Rightmove’s house price report said.
Asking prices for homes in East Anglia rose by the most in July, registering a 6.1 per cent rise to £207,166. Asking prices in the North West, East Midlands and the South East all fell, dropping by 3.8 per cent, 3.5 per cent and 0.3 per cent, respectively.
Owners of semi-detached properties increased their prices the most, with the average asking price rising 1.8 per cent to £193,298. Prices of flats and apartments rose least, up only 0.6 per cent to an average of £182,800.
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