LONDON, May 16, 2011 /PRNewswire/ -- The Rightmove House Price Index for May 2011 is released today and reveals that average asking prices for new properties coming to the market saw a 1.3% increase over the past month to now stand at GBP238,874.
Base rates of 0.5% and continuing lack of mortgage availability are enabling the housing market to stay in its 'low transaction limbo', with few forced sellers driving prices down and few genuinely proceedable buyers. With such low transaction volumes, asking prices do not necessarily reflect the market fundamentals, so continuing demand for good quality property (http://www.rightmove.co.uk/) in better areas and a lack of pressure to sell have enabled prices to appear to defy gravity. New sellers' asking prices are now only 1.5% below May 2008's peak of GBP242,500, although the recent resurgence of inflation means that they are down by around 10% in real terms.
Miles Shipside, director of Rightmove comments: "The Bank of England's decision to hold interest rates at unprecedented low levels, compared to all other property market downturns, has disrupted the traditional economic formula of an excess of supply over demand leading to lower prices. It has thrown some sellers a lifeline in their quest to hold on to the gains they made during the boom era, though the market has failed to build up a head of steam due to continuing red signals from mortgage lenders, and the normal spring momentum being diverted into a siding by the warm weather and the Royal Wedding."
The lack of listings coming to market during the extended bank holiday period for Easter, the Royal Wedding and May Day no doubt had an effect on new sellers' asking prices, as a slump in seller numbers leads to some estate agents (http://www.rightmove.co.uk/estate-agents.html) competing for new instructions by agreeing to market at unrealistic prices. The weekly run-rate of new instructions prior to the Easter holiday was circa 29,000. In the two week period between the holidays this fell by 30% to an average of just 20,000, resulting in higher average asking prices for properties coming to market in the latter part of the period.
Shipside adds: "Estate agents usually see their stock turnover more quickly during the spring, but this year's slower market suggests that stock levels may exceed Rightmove's previous record of 79 properties per branch over the next few months."
For further statistics and to download the Rightmove May 2010 House Price Index please visit - http://www.rightmove.co.uk/news/house-price-index or search for local house prices (http://www.rightmove.co.uk/house-prices.html) at http://www.rightmove.co.uk/house-prices.html
Rightmove Press Office, firstname.lastname@example.org, +44(0)207-087-0700
SOURCE Rightmove Group Ltd