OPTIMISTIC estate agents have put asking prices up sharply in expectation of a spring recovery from the housing slowdown, figures released today suggest.
Asking prices rose by 2.3 per cent this month, the biggest increase since last June, according to Rightmove, the property website.
Analysts predicted that house prices are set to rise over the next few months after a seasonal drop in activity during December and January, when prices fell by 0.3 per cent and 0.1 per cent, respectively. Last week the Council of Mortgage Lenders reported that the number of mortgage approvals had fallen to its lowest level in six years.
However, there were indications that estate agents may have raised prices too much this month, after surveys showed that buyer demand has dropped significantly. Rightmove said that inexperienced estate agents were failing to price realistically and were gambling on the market recovering.
Miles Shipside, commercial director of Rightmove, said: “Asking prices have risen this month, as is typical of the last few years, but it’s not a typical year that sellers and their estate agents have become accustomed to. Activity levels have been really low since summer last year.”
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The average rise of £4,321 took the annual rate of house price inflation to 11.1 per cent, up from 10.9 per cent last month. The length of time that houses remain on the market declined from 87 days to 85.
The price rise was highest in the North West and the West Midlands, at 5.9 per cent and 4.9 per cent, respectively. However, asking prices in the North of England fell by 3 per cent, Rightmove found.
All types of property saw an increase in asking price. The strongest recovery was in higher-value houses, which is seen as an apparent signal that the market remains weaker among first-time buyers.
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