Optimistic sellers lift asking prices

Optimistic home sellers are continuing to "romp away from reality", with a further 0.6 per cent increase in asking prices recorded by the property website Rightmove.com.

Rightmove said that while this represented the sixth consecutive month of rises, the trend was unlikely to last and the rest of the year would see a steady decline as sellers came to terms with the weak fundamentals in the market. Tax hikes, high inflation, minimal pay rises and a shortage of mortgage finance seem likely to keep consumer confidence and home values subdued at least for the rest of the year. In some parts of the country cuts in public spending and jobs will hit particularly hard.

The Royal Institution for Chartered Surveyors recently reported a rise in the number of homes put up for sale and a rise in agents' inventories, both signals that the temporary shortage of "quality" stock that had kept prices stable was falling away.