Property asking prices outpaced by inflation
The average price of new property coming to market rose by 1% in June to £246,235, new data from Rightmove shows.
This is the third consecutive monthly rise and sellers’ prices are being buoyed up by more robust southern regions with new asking price records in London and the South East.
Retail price inflation
However, sellers’ record asking prices fail to keep pace with retail price inflation. While Rightmove’s index shows sellers’ prices are now 2% up on August 2007, the month before the UK economy faced the run on Northern Rock, they have fallen considerably in real terms when compared to retail price inflation over the same period.
Rightmove calculates that in real terms sellers’ prices are an average of 13% lower. London is the only region where there has been an inflation-busting increase over the same five year timescale, with asking prices 3% ahead of the national Retail Price Index.
Miles Shipside, director at Rightmove, commented: “While the national average price of property coming to market has set new records in each of the last three months, sellers should not break out the bunting in celebration until they have done their homework. It remains a very local market ruled by property style and location.
“Agents report a two-tier market where those who can afford to price realistically are selling, while those who are equity-poor are struggling to sell as they often have to price up to make any prospect of a move viable.
“The traditionally more active spring window is closing and a summer of sporting distractions underway. Cutting your asking price to be cheaper than your competition and promoting your selling points better will be the key to avoid being an also-ran in the race to sell”.
Prior to the Jubilee four-day break 29,394 sellers a week came to market, the highest new listing run-rate for two years. Rightmove says this suggests further increases in asking prices are unlikely as fresh supply exceeds summer demand.