A degree of optimism has returned to the housing market as the Rightmove.co.uk house price index indicates an increase in asking prices.
Over 100,000 sellers entering the market have pushed up the average asking price by 0.5%, which works out as 941. Asking prices had fallen in the previous three months by 3,235, which tempted buyers back into the market, encouraging a slight upward pressure on prices.
The turn in the market has led to a downward shift in unsold property stocks per estate agency branch from a peak of 73 in May to 71 last month.
Some commentators expected house prices to actually fall significantly as part of a downward cycle of the property market. However, this has not happened, giving buyers the confidence to re-enter the property market as the threat of losing money on a property purchase has receded. Rightmoves annual rate of asking price inflation now stands at 1.5% having bottomed out in July at 0.2%
Signs of increased confidence in the housing market are evident from a narrowing of the gap between sellers asking prices and buyers ability to pay.
Mike Shipside, commercial director of Rightmove.co.uk, says: There is growing evidence that increasing confidence and the summer fall in asking prices have helped narrow the gap between sellers’ asking price expectations and buyers’ ability to pay. This has encouraged over 100,000 sellers entering the market to push up prices, halting the previous three-month slide in prices.”
Shipside adds: After five years of booming house prices, followed by a year-long worry about a crash, we appear to have had a soft landing. Now we have touched down at a sustainable level of pricing, buyers and sellers are gaining in confidence. However dont expect the market to take off again until a refuelling by more first time buyers, lower mortgage rates and a continuation of realistic pricing by sellers and their estate agents.