House Asking Prices Return to Pre-Credit Crunch Boom Levels

House asking prices across the UK have jumped at an annual rate of 7.3%, the highest rise since October 2007, as the housing market returns to pre-credit crunch levels.

House Asking Prices Return to Pre-Credit Crunch Boom Levels

House asking prices across the UK have jumped at an annual rate of 7.3%

This surge has led asking prices to reach a new national average of £262,594, a £17,000 increase from the average asking price recorded this time last year, and the highest annual rate of increase that Rightmove has recorded since October 2007.

Month-on-month asking prices have risen by £7,000 resulting in a 2.6% increase, and the annual change recorded this month was higher than in March.

The Rightmove House Price Index also reports that, although the number of properties coming onto market in the early months of this year is 13% up on this time last year, there still remains a simple mismatch between supply and demand in locations across the UK.

The report states that the market in the south remains structurally undersupplied, with high demand remaining unfulfilled by increases in supply of between 8% and 13% so far this annum, compared to last.

However, construction across the north has surged far beyond this, with five out of six regions recording a supply boost of 18% or more, as developers respond in order to balance supply with demand.

Despite this increase in construction, which usually results in a levelling out of asking prices as more stock arrives onto the market, northern cities have continued to record increases with the average asking price jumping nearly £4,000 from last month, resulting in a monthly upward lift of 2.7%.

The house price index however continues to make claims of a North-South divide, claiming house prices in northern regions are still an average of 6% behind results recorded in October 2007 and, while this shows the growth still available in the market, it is in stark contrast from results recorded by Nationwide, in their, House Price Index, March 2014.

These results showed that prices in fact jumped 18% in Manchester this quarter when compared to last, which made it the best performing city over the last year, outscoring even London, where prices rose by 17% annually.

The lack of new builds available in Manchester is said to be the reason behind this boom, causing prices to rise as demand continues to outstrip supply. Similar causes for optimism were also seen in results posted by the neighbouring city of Salford, where prices have soared by nearly four times the national average, meaning that in January 2013, when these statistics were published, Salford experienced the fastest rises out of any area other than London.

The report claims that the ripple effect from the capital, where prices are now 20% above their 2007 height, has now hit the north with prices in the North West jumping annually by 6.9%, and throughout the North as a whole by 5.9%, far higher than the annual change recorded in the same quarter last year when prices had risen by just 1.9%.

• The Rightmove Index reports a host of other positive market indicators stating that average days on the market for a listing dropped from 80 days last March to just 68 days a year later.

• The average number of properties for sale per estate agent this March was 60, down from 68 last year, showing a drop in supply, which will only further influence house price rises.

• Flats were the property type which experienced the highest asking price increase by 13.3%, while terraced houses rose 10.1%, detached 6.9% and semi-detached 5.9%.

The report also put an end to speculation that the tighter lending criteria under the Mortgage Market Review (MMR) will reduce accessibility to the market by making it harder to get a mortgage, therefore causing buyer demand to drop.

It does this by claiming that statistics, which showed an 8.8% drop in the total value of mortgages for property purchases in February compared to January, were a result of slower processing by lenders as new systems are introduced to comply with the MMR requirements, rather than a real drop, and insist that volumes will recover.


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