Lack of supply 'pushing London house prices up'

A constraint on property supply is pushing up house prices, according to new findings. 

The Rightmove House Price Index, showed that house prices have soared by record levels this month.

Asking prices across England and Wales increased by one per cent month-on-month in January to reach an average of £243,861.

This represents the biggest monthly jump that has been recorded for this time of year since records first began in 2002.

The Rightmove figures showed the average home has seen its value rise by £2,406 this month. January is traditionally the month that prices start to fall.

The property website claims the rise has partly been driven by a lack of available properties.

Annual price rises were felt most strongly in the capital, according to the data, which revealed that London asking prices increased by 7.0 per cent, taking the average price to £514,704.

Commenting on the findings, Miles Shipside, director of Rightmove, said there was also some evidence that some sellers were not willing to sell their property for less than the asking price.

He added: 'This is the strongest start to a new year for house prices that Rightmove has ever recorded, and that will get some potential sellers salivating at the thought of better moving prospects. The sums have to stack up for most property owners before they will consider a sale; some will have to achieve a higher sales price to fund a move while others will have a figure in their heads that they’re not prepared to go below."

The one per cent rise this month will add to concerns that the housing market is starting to enter a bubble. The north of England was the only region to see asking prices fall year-on-year, with a small 0.1 per cent decrease, meaning the average asking price fell to £136,786.

Published 21st January, 2014

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