House sellers start upping their prices

AMBITIOUS property sellers hiked their average asking prices by 3.2 per cent as they hoped for a more prosperous 2010, property website Rightmove said today in its latest monthly survey.

This is the greatest monthly rise since April 2007 and is somewhat surprising given the difficult UK and global economic picture.

But a shortage of stock in popular locations has supported upward pressure and London sellers are asking an average of £427,987, a new record for the capital. Indeed, London asking prices are now 10.3 per cent higher on February 2008. Only the north and the south west have yet to see annual asking prices turn positive.

Miles Shipside, commercial director of Rightmove said: “A price jump of over 3 per cent is more comparable to the pre-credit-crunch boom-times. Sellers are setting their sights higher, and some agents are going along with them to win scarce instructions.”

However, there are concerns that the sharp rise may not be sustainable when households are still credit constrained. This has not yet put sellers off, said Shipside, but he said: “Sellers must realise this market is more akin to the mortgage-rationed times of the 1970s and 1980s than to more recent times of relatively easy availability.”

Attracted by higher prices, sellers are being tempted back to the market. But with much of the 2009 rebound underpinned by a lack of stock, then the current upward price pressure will not be sustainable with the restricted number of buyers.