Home sellers lose touch with reality as asking prices rise

Sellers are continuing to “romp away from reality”, Rightmove said this morning, as asking prices for properties new to the market over the last month went up yet again.

The latest rise, of 0.6%, or an average of £1,520, means that the average asking price for a home new to the market now stands at £240,394.

It is the highest ever asking price for June and is the sixth month on the trot where asking prices have risen.

The figure compares with the Halifax’s current ‘mortgage agreed’ selling price of £160,519 and Nationwide’s £167,208.

Altogether, asking prices for properties coming on to the market have risen 8.1% or an average of £17,984 this year.

But Rightmove is now predicting that asking prices will fall 7% over the rest of the year, noting that the overall market is stagnant with mortgage levels at half those of 2007, and a lack of buyers.

According to Rightmove, there is an average of 78 properties unsold at each estate agency office. The unsold stock figure was 69 back in January and has been rising throughout the year.

Miles Shipside, director of Rightmove, said: “As the seasonal surge in demand begins to fall back, new sellers’ asking prices will also have to ebb away.

“With mortgage approvals stuck at half the normal level, the number of sellers who can find a buyer is likely to be reduced by a similar proportion.”

He added: “Increasing stock levels are a clear indication of buyer appetite failing to keep pace with the number of sellers who are showing some hunger to sell.

“However, with most sellers able to take their time and wait for an offer that matches their expectations, we are seeing the highest ever asking prices for the month of June.

“High levels of unsold stock and record asking prices cannot remain happy bedfellows for long, so we expect to see this romp away from reality to reverse itself in the second half of the year as the over-supply of property and under-supply of mortgages reassert themselves and exert downwards price pressure.”

Today’s Rightmove report also shows a widening ‘wealth’ gap between the south and the north, with asking prices largely going back in the north and up in the south.

But Shipside said this was not always the case: “Wealthier locations in the north are definitely bucking this trend with brisk activity, and poorer areas in the south are struggling just as much as similar areas in the north.”

London once again bucked all trends, with asking for new properties for sale up an astonishing 1.8% in the last month – an extra £7,686 on the asking price. The average asking price for a London home is now £429,597.