Crisis? What house price crisis?
|
Sellers putting their homes on the UK property market are now asking for prices even higher than we saw when the market was at its peak. Find out why they could regret it
Asking prices for homes in the UK have hit a new record national average of £242,500 in May, according to property website Rightmove.
The increase of £2,879 over April's figure was a leap of 1.2% - and will most likely only mean pain for sellers in the long run, as they will be forced to drop prices to make a sale, the company predicts.
According to the May house-price index, these new-to-market sellers are living in denial about the end of easy credit and the drought in mortgage products, and delaying the return to affordability needed by first-time buyers to kick-start the market.
search smarter
Miles Shipside, commercial director of Rightmove, said new sellers could see the storm clouds overhead, "but seem to believe it’s only raining on other people".
"The reality is it started raining last September, and has reached storm force in the last month. The free-flowing mortgage tap has been turned off," he said.
"Sellers who are hanging out to achieve last year’s prices need to accept that the market has fallen and that they will end up being punished by a lower price in the long run."
The biggest jump in asking prices was seen in the south-east, which recorded a 4.2% rise and fuelled the new record national average. The traditional spring marketing of larger and more expensive family homes pushed the average up even higher.
Mr Shipside said: "Sellers need to act in a more coordinated way to help improve affordability throughout the chain. However, there are thousands of estate agents and hundreds of thousands of sellers, so reaction to a deteriorating market is a slow process."
