New seller numbers hit a two-year low boosting asking prices for the first time in three months with record Internet search numbers indicating stirring buyer interest.
January prices rose 0.3% (£711) following substantial falls amounting to 6.2% during November and December. This breaks the falling house price trend where sale prices have fallen in five out of the last six months, said Rightmove.
Miles Shipside, director of Rightmove, said the market remains thin and open to volatility, but the property shortages in popular areas are pushing prices up giving a “positive sheen” to the UK average. Less desirable locations and property types are putting prices under pressure due to a famine of ready wiling and able buyers.
Rightmove said the higher levels of equity built up by detached property owners is making it easier for these owners to find the deposit to move, which is why detached properties are recording year-on-year price rises of 1.6 against 1% falls for flats, terraces and semi-detached properties.
Shipside adds: “This is a two-tier market. Those areas and property types coveted by mortgage-ready buyers are likely to experience a supply famine that will help underpin their prices this spring. Wherever those deposit-rich choose not to wander, the on-going mortgage famine will ensure sellers in those areas will remain buyer-hungry and will continue to see downward price pressure.”
Rightmove recorded its busiest ever day on 11 January with over 28.3m
pages viewed. In contrast, fewer properties were put on the market in January, with average weekly numbers of new listings running at 9,159, compared to 10,125 last year and 17,000 pre-credit crunch, said Rightmove.
Semi-detached properties are in shortest supply, down 30% on last year, while detached, terraces and flats are all down around 10%.
“Owners of semi-detached homes wishing to move rely heavily on the ability of terrace home-owners to trade up, but terrace occupiers, in turn, are hardest hit by the dearth of first-time buyers and lack of chains,” said Shipside.
For owners of semis bought within the last few years, the overall price standstill during that period has probably seen their equity stagnate or diminish, added Shipside.
Base rates have been much discussed but the January VAT rise from 17.5 to 20% has had little discernable effect on the housing market so far, said Rightmove, although this is likely to change.
Shipside commented that the VAT rise was more likely to affect the feeder layers of the housing market rather than the more “financially resilient” owners of detached houses.
Shipside added that people were undoubtedly still searching properties as shown by record internet traffic numbers, but with less money in their wallets stability in base rates over 2011 has become more important to protect against rising repossessions and encourage greater transaction numbers.
