London asking prices up 6.5%

Permalink: London asking prices up 6.5%
by Kay Murchie

Property website Rightmove has today revealed that asking prices in the capital have soared 6.5% to £416,157 in the four weeks to 10 October.

The rise means property asking prices in London have smashed through the peak of November 2007 as a lack of properties for sale is resulting in vendors to raise their prices.

In the meantime, the group’s house price index also revealed that asking prices in England and Wales are now higher than they were this time last year, growing 2.8% in the four-week period.

Rightmove said a lack of homes coming up for sale resulted in a £6,188 rise in asking prices in England and Wales - the largest since February 2008, taking the average property price to £230,184.

Rightmove’s director Miles Shipside comments: “Some agents are virtually ’sold out’ and are reporting available stock levels in single figures. In this sort of market sellers quite naturally will be tempted to test buyer appetite at a higher figure.”

According to the property website, there were 95,000 homes put up for sale in England and Wales during the four-week period - 36% less when compared with the same period in 2007.

Meanwhile, a further hindrance within the property market continues to be the lack of mortgage products available, which has slumped from 15,000 to 1,500 in just two years, according to Fathom Consulting,

Many first-time buyers continue to be unable to get a foot on the property ladder without a hefty deposit of at least 25%.

Furthermore, the Financial Services Authority (FSA) has today revealed a shake-up in lending which will see affordability tests for all mortgages and making lenders legally responsible for loans that cannot be repaid.

Under new proposals, the FSA will force banks and other lenders to conduct thorough checks on applicant’s incomes before granting a mortgage, which will include existing loans and a consumer’s spending habits.

The new proposals are likely to further hinder the mortgage market, according to many industry experts.