Prices have risen by 2.1% over the past four weeks and by 3.3% since the last week of December, bringing the average asking price across the country to £174,506. Annual inflation this month hits 10.0%, slightly up on the average figure of 9.7% seen since September 2003, and suggesting that the trend in house prices remains consistently upward.
Based on asking prices of properties newly advertised by estate agents on the web site and representing a market share of almost 40%, the Rightmove Index gives the earliest and most accurate indication of future trends in the market. Historically, Rightmove has reported slightly lower levels of house price inflation than Halifax and Nationwide, who base their indices on their own lending data – and thus exclude cash purchases and include relatively few high value properties (prices of which have been less buoyant over the past year).
Miles Shipside, commercial director of Rightmove, comments: “The average asking price on a property has increased by over £5,500 in 6 weeks, as a shortage of supply combined with steadily growing demand push up prices at which properties are marketed. The sharp surge in asking prices since the New Year looks set to feed through into higher transaction prices, as agents report a very busy January and February, with strong interest from prospective buyers. I’m expecting Halifax, Nationwide and the ODPM to report further significant rises in their house price indicators, reflecting the clear trend we’re already seeing in asking prices.”
2003/4 Annual house price inflation
Jan 26.5%
Feb 23.5%
Mar 22.5%
Apr 17.8%
May 15.6%
Jun 14.0%
Jul 13.2%
Aug 12.4%
Sep 9.1%
Oct 9.8%
Nov 9.9%
Dec 9.6%
Jan 9.9%
Feb 10.0%
“Prospective purchasers have returned to the market quickly in 2004, as evidenced by a strong upswing in interest via the main property web sites and through estate agents’ doors. For example, pages viewed on the Rightmove site are 74% higher than a year ago, while estate agents in some areas report viewings up 40% or more.”
“It only takes a modest percentage of these interested home seekers to become actual buyers for the market to see a major upswing. At the same time, stocks are still somewhat depleted, which is one of the key reasons why prices are rising again.”
Prices rose in 7 out of 10 regions, the exceptions being the East Midlands (-1.5%), Yorkshire & Humberside (-1.1%) and the South West (-0.1%). The West Midlands bounced back after last month’s seasonal decline – up by 10.8% after a fall of 8.3% last month. All other regions rose strongly: the North (+4.4%), Wales (+4.2%), Greater London (+4.1%), the North West (+3.3%), East Anglia (+1.8%), and the South East (+0.9%).
The London market saw a strong upsurge, with a rise in asking prices of 4.1%, on top of a significant pick-up in the first 10 days of January. Average prices in the capital are now £270,019, up from £259,428 in January, and 1.5% higher than 12 months ago.
Miles Shipside concludes: “The early surge seen in the first few days of 2004 seems to be sustained and the base rate rise seems to be having little or no effect on the housing market. Raising interest rates to take the steam out of the housing market is rather a blunt instrument – we all need somewhere to live, so house purchase is not a discretionary item of expenditure for most people, and with a structural shortage of homes in this country, over the long term the only way for house prices to go is up.”
“It’s shaping up to be a pretty busy spring in the housing market.”
