House prices are at a record high, according to Rightmove?s latest report. Figures show that property shortages are pushing up prices, with demand outweighing affordability constraints. ?Demand is a lot more buoyant overall than at this time last year, so a rise of up to 10% in the faster moving regions, such as parts of London and the South, could be on the cards this year,? says Miles Shipside, the company?s Commercial Director.
Despite widespread predictions that affordability pressures would keep house prices in line with inflation and wage rises, Rightmove?s figures show that the average property price is at a record high of £209,829.
Thus while other housing market indicators are forecasting diminishing demand in the second half of 2006, Rightmove is increasing its price rise forecast from 5% to 8%. This would mean an average national asking price of £212,025 by the end of the year – a rise of £15,706. ?The housing market is set to defy the downward pressure from increasingly stretched affordability with double the rise that was forecast by the industry just 5 months ago,? comments Mr Shipside. ?It can?t keep rising like this but will flatten out rather than fall back substantially, as there are few ?distress sales? from vendors who are forced to sell at any price?.
The timing of Easter in close proximity to the May Day bank holiday exacerbated the shortage of supply of new property coming onto the market this year, the report says. Home-hunters, who constitute a large proportion of future sellers, failed to view property that might have tempted them onto the market. This pause in activity led to the stabilization of the average stocks per estate agency branch at 65.
Meanwhile time on the market is falling – dropping from 75 days to 70 days in the last month: ?Agents are reporting more sales on new listings, as opposed to their older stock,? says Mr Shipside, adding that if a property is not selling, a price-drop or makeover is a good idea before the market quietens over the summer holidays.
