Average asking prices in the capital rose 1.6 percent from the previous month to 431,013 pounds ($703,000), Rightmove Plc, the operator of the U.K.’s biggest property website, said in an e-mailed statement today. From a year earlier, prices are up 2.2 percent, against a 0.1 percent increase in England and Wales
“London is a stable market that behaves differently from the rest of the country,” said Justin Knight, a real-estate agent at Bective Leslie Marsh in west London. “There’s a real imbalance in supply and demand.”
Bank of England policy maker Andrew Sentance said April 14 that unaffordable homes and a squeeze on lending may mean the revival in the property market lags an economic recovery driven by global demand. The exception is London and the South East of England, where property has a stronger link to the performance of the financial industry and global markets, he said.
Nationally, house prices rose 1.7 percent in April from March, according to Rightmove, which said the increase “looks misplaced” as supply is outstripping demand. The average number of properties real-estate agents have available for sale rose to 74 from 70, the biggest jump since May 2007.
In London, more buyers are paying cash as they shift assets from financial products into property, Knight said. While the number of prospective buyers at his firm has doubled from a year earlier to about 1,200, people are reluctant to sell.
A six-bedroom house he’s offered in Brook Green in London will probably go to an all-cash buyer paying “significantly” above the 2.3 million-pound asking price, he said.
Cutty Sark
Rightmove said the gain in London asking prices was led by a 5.5 percent increase in Greenwich, where the Cutty Sark clipper ship is docked and the world’s prime meridian line is located. Nationally, eight of 10 regions showed increases, led by a 3.3 percent jump in the South West of England.
U.K. banks approved 46,967 mortgages in February, little changed from a year earlier and less than half the level at the start of 2007, the peak of the housing-market boom, Bank of England data show.
The central bank left its key interest rate at a record low of 0.5 percent this month to steer the economy through the biggest public spending squeeze since World War II. Policy makers split four ways on policy last month, with three members voting for an increase to tame prices.
The prospect of higher borrowing costs may dent the property market at a time when buyers are already feeling a pinch from a credit squeeze and should lead sellers to consider cutting asking prices, Rightmove said.
Buyers are “still struggling to raise the necessary finance,” Miles Shipside, commercial director of Rightmove, said in the report. “With government cuts starting to bite and interest-rate rises still expected in the second half of the year, those who are serious about selling should look to price more keenly.” For the latest updates PRESS CTR + D or visit Stock Market news Today
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