New sellers’ asking prices were up on average by 3.6 per cent - or £9,409 - in May, the largest ever rise for this time of year..
The report from Rightmove indicates that the price of homes coming onto the market is now just under nine per cent higher than a year ago.
London prices as usual dominate the figures, up 16.3 per cent, meaning that the average asking price in the capital has risen nearly £80,000 so far this year alone. Ten out of 32 boroughs have experienced annual rises of over 20 per cent. However, the rest of the country up by an average of just under five per cent.
"May is a traditionally bullish price rise month, though this year’s jump beats the previous May high set in 2002," said Miles Shipside, Rightmove director. "A late Easter in the heart of the househunting season has not only concertinaed the traditional hottest home-moving period by several weeks, but also stagnated seller numbers, further stirring up prices in areas of buoyant demand."
He added that this month has seen the number of properties coming to market fall by one per cent compared to April as bank holidays have affected seller activity.
"Agents in the capital report a consistently high level of would-be buyers in markets that are not yet out of reach for Londoners. So while you might describe London’s annual jump of over 16 per cent as being as a result of a very frothy market, it is underpinned by long-term demand and a genuine shortage of housing supply. The northern regions are still below their previous peaks, and while all four southern regions are at all-time highs, the average annual rise outside London remains below five per cent.”
Rapidly increasing house prices represent a "deep, deep" threat to Britain's economic recovery, Bank of England Governor Mark Carney warned at the weekend.
Ben Butler, Sales Manager of Morgan Randall in Canary Wharf said that the 43 per cent annual increase in the borough was because various areas of Tower Hamlets are investor territory.
"There are a number of cash buyers in the market and accidental landlords who have been sitting on the side-lines since 2008 taking advantage of the buoyant conditions and selling up. Around two thirds of the properties we are selling are going to cash buyers, and we haven’t sold a property for under asking price since around August 2013."
Paul Wilson of Dacre Son & Hartley in Leeds added: "People who have been sat renting for the past few years are now turning into motivated buyers, which has led to a shortage in supply, especially in the £250,000 to £350,000 price bracket. All the talk of the rising prices in London and a supposed nationwide bubble has created a wave up the country of vendors raising their expectations, and in some cases putting their property on the market for too high an asking price than is realistic in the market here. Those properties that are put on at sensible prices are moving quickly, so we are advising people they need to be realistic with what they expect to get."