House prices to continue surge as bubble fears grow

 

House prices are set to increase far faster than first thought, according to Britain’s biggest online property site.

Rightmove, which advertises thousands of properties across the UK, said it was uprating its forecast for annual house price inflation from 4.5 per cent to 6 per cent with a vigorous autumn in the UK property market expected. 

The decision will add further weight to the argument of Business Secretary Vince Cable that the UK property market could be in danger of overheating and that interest rates may have to rise sooner rather than later.

However, Mr Cable’s analysis is disputed by his own party leader, Nick Clegg, who insists the market is not about to experience a ‘bubble’.

Miles Shipside, Rightmove director and housing market analyst, said: “While prices fell in the month overall, the last couple of weeks have seen the start of a turnaround as more sellers choose to come to market and pitch at higher prices as momentum rebuilds”. He said the fact that the site has raised its estimate for price growth for the year to 6 per cent is partly driven by the strength of southern markets but with a nod to the increasing growth contribution by the more buoyant areas of the north.  Rightmove’s bold message on prices came despite a slight slip in asking prices of 1.5 per cent in the past month, leaving the average property on the market at £245,495.

He noted an improvement in in buyer demand that has not been matched by seller activity, leaving a shortage of new property stock that is likely to lead to an autumn surge in some sectors of the property market.

“New seller activity has fallen again this month and the lower volumes of property coming to market over the summer have resulted in price drops that seem counter-intuitive given that buyer demand is holding up,” he said. “Improving buyer activity appears to have become even further out of sync with sellers’ appetite to come to market during the summer heatwave.”

He added that “many potential sellers require green stalks of recovery rather than just green shoots” before entering the market”.

However, Mr Shipside predicted the coming months could be a good time for sellers to trade up. “Potential sellers should note there is the possibility of this autumn’s market being a better time to sell than 2014 if you are trading up. The price gap to trade up might be smaller now and there may be more competition from other sellers next year if January’s second phase of Help to Buy unlocks the housing market”.

But a rival survey from estate agent Haart published today suggests the time is also right for first-time buyers. Chief executive Paul Smith said: “This is the best first-time buyers have had it since the economic crash.”

His enthusiasm is based on the agent’s monthly housing monitor, which shows the number of first-time buyers has increased 75.7 per cent in the last year. In London, the figure has more than doubled, up 102.4 per cent.

A further positive sign for hopeful homebuyers is that first-time buyer house prices have fallen 1.4 per cent over the year to an average £144,350.

Discover more property articles at Homes and Property
PROMOTED VIDEO
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Property search
Property search
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Process Improvement Analyst (Testing)

£40000 - £45000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Service Delivery Manager - Derivatives, Support,

Negotiable: Harrington Starr: Service Delivery Manager - (Derivatives, Support...

Technical Account Manager - Java, FIX Protocol, FIX 5.0, C++

£30000 - £55000 per annum: Harrington Starr: Technical Account Manager - Java,...

WPF .NET Developer

£300 - £350 per day: Harrington Starr: WPF Analyst Programmer NET, WPF, C#, M...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform