Property asking prices rise by 3.1%

(GETTY IMAGES)

Property asking prices raced ahead by 3.1% during February as new sellers followed the traditional seasonal pattern of pricing high, figures showed today.

The increase, which followed a 0.3% jump in January, left the average property on the market in England and Wales costing £230,030 - broadly unchanged from a year earlier, according to property website Rightmove.

The group said despite the house price falls seen during 2010, sellers were still following the usual seasonal ups and downs, with many unwilling or unable to drop their asking prices.

But the market is still characterised by a lack of demand, as the typical mass-market buyer finds themselves with insufficient equity or unable to raise the mortgage finance they need to trade up the property ladder.

Miles Shipside, director of Rightmove, said: "With lenders stating that they expect mortgage lending to remain static at around 2010 levels throughout 2011, and new seller numbers practically unchanged year-on-year, what might have been seen as a passing phase of low transaction levels in the housing market now looks set to be the norm for the foreseeable future."

He said only around 530,000 mortgages were taken out during 2010, while Rightmove recorded 1.3 million properties coming on to the market, highlighting the imbalance between supply and demand which has been putting downward pressure on prices.

The West Midlands and the East Midlands were the only areas of the country where house prices did not rise during the month, with asking prices falling by 1.4% and 0.1% respectively.

Yorkshire and Humberside saw the biggest increase at 6.7%, followed by the North at 5.4% and East Anglia at 5.3%.

Meanwhile, figures from the Home Builders Federation showed that the number of homes that local authorities gave planning permission for fell for the third consecutive quarter doing the final three months of 2010.

Just 33,000 new homes were approved for construction across Great Britain - around half the level being approved each quarter four years ago.

Social housing was hit the hardest with only 5,500 affordable properties approved during the final quarter of last year, the lowest level recorded by the survey.

Stewart Baseley, executive chairman of the HBF, said: "These figures are extremely concerning. A reduction in permissions granted now will see fewer homes built in future years, exacerbating the already acute housing shortage we are currently experiencing.

"The figures demonstrate the necessity for the Government to clarify exactly how the new Localism based planning system will deliver the homes, and supply the growth we desperately need."