Average home asking price hits £250,000 as confidence picks up

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The Independent Online

Average property asking prices have climbed above a quarter of a million for the first time, amid signs that the positive outlook in London has spread to every region.

According to the Rightmove House Price Index, the South-east has posted the biggest price increase, climbing 14.8 per cent since the start of the year.

The national average asking price of a property coming to market now stands at £252,798, after edging up 1.2 per cent over the month.

While London still far outstrips the rest of the country, with average asking prices reaching a new high of £515,243, prices in the South-east have soared to £329,968.

In the last six months asking prices in the North rose 9.2 per cent, compared to a 10.6 per cent increase in the South, showing the recovery is pretty consistent across the country.

"The first half of 2013 saw little sign of the traditional north-south divide, with the first-half asking price surge in the North almost equal to that of the South," said Miles Shipside, director and housing market analyst at Rightmove. "This indicates a wider upturn, albeit at historically low but increasing volumes.

"The bad news for would-be buyers is that it has helped propel the average price of a property coming to market through the quarter of a million quid milestone for the first time."

The key to the strong first half is increasing consumer confidence, he said. "After a period of apparent economic stability internationally – or at least, less widely-reported turmoil and uncertainty – and some positive signs of an economic upturn in the UK, more home-movers appear willing and able to increase their commitments."

Property prices have also been boosted by increasing competition among lenders, which has been un derpinned by the Funding for Lending scheme.

Also relevant is the fact that, adjusting for inflation, prices have fallen in every region since 2008, apart from London.

"The true signs of a wider housing market recovery are an increase in transaction numbers and more new homes being built, not just increasing prices," said Mr Shipside.

"It seems like the bubbling South is being joined by some fermentation activity further north, perhaps encouraged by prospective buyers in the North seeing prices still well below their peak in nominal terms and nearly 20 per cent down in real terms."

Estate agents have also been reporting that with Help to Buy for the wider market due in January, some buyers are pre-empting any potential scheme-induced price rises by doing a deal now.

However Mr Shipside warned that the positive performance in the North could falter soon. "We have seen a strong northern rebound in the first half of this year, virtually keeping pace with the southern regions in spite of the strong London market and price lift-off in the South-east. It remains to be seen whether the northern momentum has enough legs to last the course for the remainder of 2013."