Property demand outstrips supply as prices rise 0.6%

21 September 2009 / by Rachael Stiles

Average house asking prices have risen 0.6 per cent in September, as increasing numbers of properties are sold, pushing up demand.

According to the latest index from, the average asking price is now £223,996, up from £222,762 the previous month and just 1.5 per cent lower than at the same time last year, compared to August when it was 3.1 per cent lower than in 2008.

During a seasonal decline widely expected by market experts, August saw a 2.2 per cent fall in the average property asking price compared to July's figures, and for months agents have been struggling under low levels of sales.

Estate agents are now experiencing their lowest stock levels for 18 months, with 10 properties currently coming off the market for ever eight that go up, but this is more as a result of home owners taking their properties off the market than a rise in sales, due to a continued lack of choice of properties to buy and while deposit requirements remain elevated.

While some cheaper deals have come onto the mortgage market in recent months, lenders continue to restrict access to them by demanding high deposits, often as much as 40 per cent.

Rightmove has accused mortgage lenders of competing over the most cash-rich buyers by making the best deals unavailable to many would-be homeowners.

Commenting on the latest house price figures, Miles Shipside, commercial director of Rightmove, said: "There’s an Autumn window for new sellers where a sensible asking price combined with this better market could get you traded up into your next home before Christmas."

But, he added that the lack of choice in the current property market could be putting some would-be sellers off, and they "will have to decide whether to take a chance on finding something fresh to the market after they have found a buyer." he said.

Mr Shipside concluded: "Confidence is up, stock is down, and the number of people searching is high. There are lots of positives but too few buyers can put down the 40% deposits that are needed in order to secure the best mortgage deals. Finance greases the wheels of the property market, and it is anybody’s guess when we might see the necessary level of competitive funding return."

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