Low Supply Pushes London Residential Real Estate Asking Prices To Record Levels

United Kingdom residential real estate asking prices in January experienced their highest monthly increase since April 2007. Scarce inventory, and high agent demand for new stock, have pushed …

United Kingdom residential real estate asking prices in January experienced their highest monthly increase since April 2007. Scarce inventory, and high agent demand for new stock, have pushed asking prices up year-over-year. See the following article from HousingWire for more on this.

As HousingWire reported over the weekend, sellers boosted asking prices on homes in the United Kingdom by 3.2% over January, according to UK property database Rightmove.

Scarce new sellers of UK homes bumped up asking prices to a national average £229,398 (US$359,499), while asking prices on London homes (like those pictured above) reached an all-time high, according to the February Rightmove house price index released Monday.

The monthly rise in average asking price is the highest it’s been in years, since April 2007, Rightmove said:

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The UK housing market, which has been “stock-starved”, saw more than 90,000 new listings during the month, Rightmove said. The boost in asking prices, although “surprising” in the current economic setting, is supported by high demand particularly in areas short in supply. Asking prices of London homes, for example, reached the highest average Rightmove has recorded.

“Sellers are setting their sights higher, and some agents are going along with them in order to win scarce instructions,” said Rightmove commercial director Miles Shipside. “Property for sale remains scarce in popular areas, but new supply to the market has to be priced at what buyers are willing and able to pay.”

Shipside warned, however, that these homes may not actually sell at the higher average asking price.

“An average increase of over £7,000 may prove to be a bit too spicy for some buyers’ tastes, now that economic constraints have forced them to develop a simpler palate,” he said.

Scarcity of London property for sale and agent demand for new stock pushed the average asking price of London homes up by 5% to a new record of £427,987, Rightmove said. That price is up 10.3% from a year earlier.

“Where supply remains well below historic levels, which is especially noticeable in parts of London, upwards price pressure looks sustainable,” Shipside said. “The average asking price in London has now reached a new high twice in the space of five months, with this month’s price toppling the record set in October 2009 of £416,157.”

Average national asking prices are now 6.1% – or £13,300 – higher than a year ago. Rightmove indicated new UK property coming to market will likely continue to be at higher prices in the first half of 2010.

This article has been republished from HousingWire. You can also view this article at
HousingWire, a mortgage and real estate news site.

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