Housing market revival continues
The housing market revival continued in August despite the month seeing the first dip in sellers' asking prices this year so far, a property website has reported.
Asking prices edged down by 1.8% month-on-month to £249,199 on average - but a string of price increases seen over the last seven months means that they are still £20,000 higher now than at the start of 2013, Rightmove said.
In further signs of the market gathering pace, asking prices on flats reached a record high this month at £209,652 typically. Flats are in strong demand due to high numbers of buy-to-let investors looking for decent returns and a recent surge in first-time buyers who are finding it easier to access a mortgage entering the market.
Asking prices on flats are up by 5.9% year-on-year, indicating that first-time buyers, who traditionally buy this type of property, will potentially have to stretch themselves further to get on the housing ladder.
Rightmove said that the small fall in sellers' prices this month across all property types was "less pronounced" than the usual dip seen at this time of year. It is usual to see prices tumble by more than 2% in August, as by tradition people selling their home over the summer holidays have a more pressing need to sell and will price more keenly to tempt buyers.
The website said the Government must now do more to tackle the problem of a lack of homes available for sale to avoid an "unsustainable boom" in prices.
East Anglia and the West Midlands were the only regions to see asking prices increase month-on-month, by 3.1% and 0.2% respectively. The North West saw the biggest monthly fall, at 3.5%, although on an annual basis prices there are up by 0.9%.
London recorded one of the sharpest month-on-month asking price drops, at 2.8%, although asking prices in the English capital are still around 10% higher year-on-year. Asking prices in Wales were flat month-on-month, but they are also more than 5% higher than a year ago.
Government schemes such as Funding for Lending have been credited with boosting activity by widening mortgage availability.
But particular concerns have been raised about the potential for a house price bubble to be created following the second phase of an initiative called Help to Buy, which will underwrite £130 billion of low-deposit mortgage lending with state guarantees from next year.
A lack of homes to choose from is one of the main factors keeping prices up and housing charity Shelter recently warned that less than half the houses are being built each year than are needed to tackle the "chronic shortage of homes".
The Royal Institution of Chartered Surveyors (Rics) reported last week that house prices are rising at their fastest rate since 2006, while mortgage lenders said that first-time buyer numbers have soared to their highest levels since 2007.
Miles Shipside, Rightmove director, said: "Demand is already on the up, and that's before the roll-out of phase two of the Help to Buy stimulus.
"It is now critical that the supply of properties improves so that the goal of a significant increase in transaction numbers is not overshadowed by an unsustainable boom in property prices.
"Flats are most in demand by first-time buyers and buy-to-let investors and we have seen prices for this property type hit their highest ever level as supply fails to keep up with an increase in demand at the bottom of the market."