As the housing market continues to grow, so does the confidence of sellers, who are now raising the asking prices of their homes by an average of 7%, according to property experts Rightmove.
Over the past month the average asking price has risen by 2.6% and over the past year it has risen by 7.3%, which is the largest annual increase seen since October 2007, before the recession hit.
A recent report from Nationwide found that sales prices had risen by nearly 40% in the last year across the north London borough of Brent. Rightmove, however has found that those prices have now increased again by 7.9% in the past month. In a similar situation, houses in Camden have increased by 7.5% and in Harringley they have risen by 7.1%.
A prediction from economic forecasters Ernst and Young, says that the 7% increase in house prices will also be seen across 2015, but they say there is no need to worry about an upcoming housing bubble. They think that a revival in house building will mean an increase in supply, and alongside tighter lending criteria this will help to prevent prices rising too high.
Miles Shipside, director of Rightmove, says:
“Records are tumbling, with a new national asking price record being set for the second consecutive month. London’s asking prices are at their highest ever level, and the strong ripple effect from the capital has also caused a new wave of record prices for property coming to market in the South East, the South West and East Anglia.”
The demand for houses in the south of the country is really getting tight, with many popular areas currently seeing only one or two properties for sale and competition really hotting up for buyers. The demand for townhouses in London under £1 million is very strong at the moment, with good schools and commutability being the big driving factors for location.
In March, all parts of the UK, apart from Wales, saw an increase in buyer enquiries, with surveyors in the east of England reporting an increase of 7% in new enquiries. For the second month in a row now sales prices have risen in the northern part of the country.
Figures from the recent Rightmove report show that in Greater London, people selling their house are now asking for 15.9% more on their property than they were this time last year. The average house price in London is now £572,000.
In Wales and Yorkshire asking prices still remain at 7% less than they have been at previous highs, and in areas such as Wakefield, 42% of properties for sale are seeing price cuts and discounts.
Peter Spencer, chief economic advisor to Item, said:
“The housing market is not experiencing a typical debt-fuelled recovery. New mortgage lending remains at rock bottom while government initiatives such as the Help to Buy schemes will be having little impact on prices in London, where activity is fuelled by cash rather than mortgage borrowing."
While house supply does appear to be increasing across the country, it is hotspots like London that are continuing to see an imbalance in demand and supply, with house prices continuing to rise. Borderline mortgage applications are now being thrown out, meaning that lending is tighter, but this might not be enough to cap the rocketing prices in the south east of England.