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Unsold homes have
jumped by the largest margin since May 2007 - just before the
property market slumped - as 'over-optimistic' sellers price buyers
out.
Home sellers' continued
optimism and agents willingness to chase new properties by allowing
sellers to demand high prices is stalling the market.
Property website
Rightmove said its monthly housing survey revealed a 1.7% increase in
the average asking price to £235,822, a rise it said was
'misplaced'.
The average number of
unsold properties per estate agent branch was up from 70 to 74,
Rightmove says.
It added that state
spending cuts and fears of an interest rate hike were knocking
buyers' confidence, but sellers were not reflecting this.
Rightmove Director
Miles Shipside said prices are likely to come under pressure as
public spending cuts and tax hikes bite.
'While stock levels
normally increase during the first half of the year, this is a larger
increase than normal,' he said in a statement. 'Those who are serious
about selling should look to price more keenly in the spring selling
season.
'While most of the
country struggles to sell or raise deposits to buy, demand from
cash-rich buyers in London has meant that sellers there can ask
record prices,' Shipside added. 'This is driven by London's
international status, its preponderance of wealthier buyers, and a
shortage of available land and properties.'
Even so, research last
week from the Association of Residential Letting Agents (ARLA) showed
how the rental market is suffering badly because of high house
prices, with families particularly in London and the South East
unable to find buyers for their large homes.
The average capital
value of rental homes has gone up 11.6% to £447,900, ARLA said. Of
its members reporting an increase in property coming onto the market
because it could not be sold, the biggest proportion was for
family-sized homes – 66% reported an increase in semi-detached and
63% reporting an increase in detached.
There was a 14.8% rise
in the average capital value in central London and 16.2% in the rest
of the South East, but this offset the rest of the UK which
collectively experienced a drop of 5.2%.
But specialist
investment strategy adviser CheckRisk will say today it expects house
prices are set to plunge by between 20% and 25% by the end of 2012.
Rising interest rates
and inflation together with high levels of private debt, reduced
mortgage lending and a shaky jobs market suggest an imminent
downturn, despite latest figures from the Department for Communities
and Local Government showing a 0.7% rise in prices for the year to
February.
'Effectively, British
people have run out of money,' said Nick Bullman of CheckRisk.
www.thisismoney.co.uk
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