Property asking prices in England and Wales rose for the first time in four months in October, with sellers responding to seasonal pressures instead of market fundamentals, a survey showed today.
Property website Rightmove, which says it captures 90 per cent of all homes for sale, said asking prices jumped 3.1 per cent this month, following drops of 1.1 per cent in September and 1.7 per cent in August.
The annual rate of growth in prices rose 2.9 per cent from 2.6 per cent in September.
Rightmove's findings counter the plunge in September house prices reported by mortgage lender Halifax, and appear "illogical" given the oversupply of homes on the market and buyers' difficulty in getting mortgages, the survey said.
Though market conditions should be a drag on the market, higher prices follow the autumn trend, with October prices rising every year since the inception of Rightmove's House Price Index in 2001, the survey said.
"Vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in a new home before Christmas," said Miles Shipside, director of Rightmove.
"Between 2007 and 2009, October sellers tried higher prices in spite of the 'credit crunched' housing market, and it's a habit that is proving hard to kick in the 'spending review' market of October 2010."
The comprehensive spending review, which on Wednesday will outline details of how Britain plans to slash its record budget deficit, is likely to dampen confidence in the housing market, Rightmove said.
Some sellers may not be able to afford lower prices, while estate agents may encourage a speculative opening price that can be lowered later, it said, adding that with sellers staying put on prices, and buyers unable to pay more, the housing market was in danger of stagnating.
"Buyers and sellers are staring each other out, and it's a question of who will blink first," Shipside said. "Even if they wanted to, buyers cannot blink unless lenders release more funds for mortgages.
"As that's not going to happen, there are likely to be some blinking sellers this winter."
Rightmove based its data on a survey of 105,769 asking prices on its website between September 12th and October 9th.
Reuters