The 18,497 sellers reversed the downward price trend as an October increase of 4.3% or less would have meant London prices fell year-on-year, said Rightmove.
“This is a normal reaction to the start of the autumn selling season after the summer holiday period. New sellers and their estate agents have an inbuilt instinct to increase prices every October – which has happened in London every year since 2002,” said Miles Shipside, director of Rightmove.
He added this hasn’t changed since the credit crunch, and while the Lehman Brothers collapse in September 2008 held the October rise down to just 0.3%, last October saw a spike of 6.5%.
“This illustrates how firmly the expectation of rising property prices is embedded in the home owner psyche in the capital,” he added.
He said the tactic is unlikely to succeed but shows how keen sellers are to keep a higher price and make sums stack up for the next move.
From a national perspective, the government’s Comprehensive Spending Review is likely to have a negative effect on housing market sentiment and consequently challenge further any perception of pricing power among sellers, he said.
Shipside said: “For some agents and sellers there is the temptation to initially launch to the market at a speculative price, knowing one can always reduce it later. Given rising stock levels in some parts of London and some signs of a tempering of buyer appetite, such a strategy stands less chance of success than a few months ago.”
Rightmove said the stock-starved market that helped promote the mini-revival in London average asking prices now has more fresh property to fuel greater competition.
He warned tightening credit and an unwillingness to bend between buyers and sellers could produce a period of stagnation, said Rightmove.
Shipside adds: “Cash buyers are more the norm than the exception in many areas of London, with agents reporting a flurry of buyers from Greece and Italy seeking safe investment havens for their cash, London’s international popularity will prevent top-end prices suffering as much as the rest of the country while the Government is re-balancing the economy’s books”.
