Asking Prices in the UK Hit an All-Time High



The average asking price for a home in England and Wales is now £243,737, an all-time high at £1,237 more than figures seen four years ago. Even so, this doesn’t paint a particularly accurate picture of the UK housing market.

Asking prices for UK homes are at a record high © Alexander Reitter - Fotolia.com

According to UK property site Rightmove, house prices increased by 2.9% in April, with the South West seeing the biggest monthly increase with asking prices up by 5.8% compared to a month earlier. Asking prices in Wales rose by 1.5%. However these figures are somewhat misleading, as they are merely asking prices rather than the price of the property actually sold for and the figures are heavily skewed by London’s strong performance.

Throughout the UK new sellers are asking 0.5% more for homes than in May 2008, but in comparison London sellers are asking 14.9% more. Removing London from the equation means prices in the rest of the UK have actually fallen by 4.3% since May 2008.

When inflation is factored in, prices have declined by 9.9% as the average price of a property would be £270,459. Although prices are recovering in the south and south-east of the country, there are still far fewer transactions than before the credit crunch, and there are fewer properties on the market, as there are 30% less properties being listed then in April 2007, and 0.5% less than April 2011.

Even the number of properties being listed in London fell by 5% in April. This shortage is allowing new sellers to set record asking prices in areas where inventory levels are particularly low such as the South West and London. Outside these areas the picture can be quite different with many properties staying on the market for months or even years.

Mortgage availability is still tightening up, and a number of lenders have already raised interest rates on their best deals. In March the number of mortgage approvals fell to 43,450 which is the lowest level since December 2010, and there were 7% fewer purchase approvals than in the same month last year.

About Allison Halliday

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.