House prices hit record high in July

UK house prices hit a record high in July, according to online real estate portal Rightmove, with sellers raising prices for the seventh consecutive month.

The average asking price rose 0.3 per cent from June to £253,658 – up 4.8 per cent from July 2012. That’s £11,561 over the past year. London asking prices jumped 12 per cent in this period to an average of £515,379, and are now 29 per cent higher than they were just five years ago (compared to seven per cent in the south east and five per cent nationally).

Rightmove has revised its house price forecasts for the year to a rise of four per cent, up from previous expectations of a two per cent increase.

Miles Shipside, Rightmove director and housing market analyst, said:

The market is currently benefiting from the ‘aggregation of marginal gains’ where incremental improvements across a range of key market drivers compound to slowly but surely build momentum. Rightmove’s lead indicators show increases in enquiries, new sellers and marketing prices. An important milestone for a broader-based and sustainable recovery is that all regions of the country now have higher prices than a year ago firmly on the record….

The ability to borrow is increasing as the Funding for Lending Scheme starts to really deliver, though it still favours those with better deposits. Lenders are squeezing their margins and, with the prospect of no base rate rise for three years, consumers are increasingly aware of moving options rather than debt burden.

The Help to Buy scheme, the centre-piece of the last Budget, has already created a marked upturn in the new-build market as recently reported in some developers’ trading updates. We even hear that some developers are ‘running out of bricks’. While stocks of some brick styles have no doubt been run down, a similar impact on the bricks and mortar of the resale market is possible from January next year. The outlook for more moves and movers for the second half of 2013 and beyond is increasingly positive.