Rightmove study finds house prices are going up

Rightmove study finds house prices are going up

	Published : Mon, 21 Nov 2005 09:45 By : James Rowe Print this Story

LONDON: The housing market is gaining further confidence as average asking prices for houses have gone up during mid-October to mid-November, according to property website Rightmove.

A study by Rightmove for the house price index indicated that there has been a 0.8 per cent increase in the prices during the period compared with the previous period. This has been the highest rise since April and following the interest rate cut in August.

Rightmove said the average asking price for a home increased to 197,855 pounds from 196,348 pounds, which also means the annual rate of increase rose to 4 per cent from 1.5 per cent. The average number of unsold properties remaining with estate agents fell from 71 to 69, the study said.

The figures are the latest in a series showing signs of revival in the property market, which was plagued for more than a year by the economic slowdown.

Rightmove surveyed 132,000 properties advertised on its website for the index. It said the results do not mean a return to the boom time, but an indication of the arrival of the "soft-landing".

The firm's commercial director Miles Shipside said the overall picture looks healthier, but there are "marked variations in activity" like over-priced properties, which have little chance of selling.

The study found that of the 10 regions surveyed, prices were falling in the East Midlands and the South East, while the biggest monthly rises were in London -- 3.5 per cent -- and Wales -- 2.7 per cent.

It is however difficult to see or believe that house prices are actually increasing when driving or walking around towns and cities. It does seem to be the same old issues, property companies are desperate to give us all a bit of confidence in property so that we continue to buy and sell.

The Government too have a vested interest that property prices just keep on increasing as this encourages equity release or loans being taken, credit card spending and the like, therefore people keep buying and the 'high street' economy rolls along, leaving any disaster that may happen, such as a collapse of house prices until later.

The single biggest issue does seem to be prices of property, which are still simply far too high for first time buyers to get started on the property ladder. As owners and in some cases estate agents make house valuations too high it is difficult how, given the state of the economy, first time buyers can get on the ladder and in turn kick start the entire property chain. From a first time buyer perspective, house prices are overvalued by between 10% and 15% at least, depending on the area.

Despite the hype of a better housing market and asking prices, which appear to remain static or increase slightly, some sellers are actually taking offers substantially lower then asking prices, which keeps things moving along. Without this, nothing much would happen in the property market at all.