Rightmove analysed 90 per cent of the UK property market between January 8th and February 11th and said that the sharp rise in asking prices was due to low supply of property in areas with strong demand.
Rightmove said that buyers attitude towards the market has improved in recent months. in a recent survey Rightmove discovered that 60 per cent of potential buyers believe the market favours them at the moment.
This is partly caused by an increase in the number of mortgage products available to those with just a ten per cent deposit and the tamp duty holiday. However, with experts predicting a drying up of bank credit, mortgage lending criteria could become stricter as the year progresses and the stamp duty holiday ending next month, market conditions could change.
The figures have been lifted by a rise in confidence and a flurry of first time buyers rushing to avoid paying stamp duty before the tax holiday ends next month, according to the research.
The strong spring bounce could also have been fuelled by confident sellers in high-demand, affluent areas, the report indicates.
New sellers in London have typically raised asking prices by 2.5 per cent to £449,252, within one per cent of last October’s all time high.
However, new listings are down by nine per cent on last year, suggesting seller shortages will add to rising prices in the capital, the report said.
Miles Shipside, director at Rightmove, said: “The biggest jump in new sellers’ asking prices for nearly 10 years indicates there is pricing power if you are selling the right type of property in the right place where enough potential buyers have access to funding.
“If your local market does not have those characteristics and your price-pump is based on little more than seasonal optimism and an estate agent’s hot air, then be prepared for buyer response to be a let-down.”
Properties coming to market in the early months of the year are often the beneficiaries of a ‘spring bounce’ in asking prices, particularly during the years between 2000 and the onset of the credit crunch.
Monthly rises of 4.5 per cent were recorded in both February and April of 2002. Since then the largest percentage monthly uplift has been the 3.6 per cent of April 2007.
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