Home prices rise to eight-month high

Data provided by the property portal Rightmove reveals that the average property asking price increased by 3.5 per cent in October compared to the previous month to £243,168, with all regions across England and Wales witnessing rises in prices.

Although the research suggests that activity has picked up in autumn from low levels reached in summer, Rightmove suggested that the hike in asking prices reflected the lack of housing supply in relation to demand.

The rise means that asking prices are 1.5 per cent higher than the corresponding month last year, despite an £11,000 decline in prices between June and September, when market activity was subdued due in part to the distraction of the Olympic Games.

Unsurprisingly, London, which is attracting huge interest from national and international homebuyers, saw the biggest jump in asking prices, reflecting the growing supply-demand imbalance in the city. Average asking prices in the capital stood at £478,071, following a 4.8% month-on-month rise.

The price jump in London was followed by the South East and the West Midlands, which both witnessed 3.9 per cent increases, while prices appreciated by 3.8 per cent in the North West and by 3.4 per cent in Wales, while East Anglia saw the lowest rise of just 0.4 per cent.

Interestingly, despite the sharp rise in property asking prices, research conducted by Rightmove shows that less than 20 per cent of home hunters would arrange to visit a property that they think is over-priced, even if it matches their criteria.

Nevertheless, the housing market has been boosted recently by various mortgage schemes, including the government's £80 billion funding for lending scheme which launched at the start of August, as they have helped to increase mortgage availability. However, much of this finance has so far been aimed at buyers with larger deposits of at least 20 per cent.

Miles Shipside (above), Director of Rightmove, said increase in asking prices "is most likely attributable to the continued shortage of new property supply".

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