House prices in the UK are on the rise again according to Rightmove.co.uk

The rise is despite of over-supply in the market. Over optimistic sellers face months of waiting for their homes to sell, however, more realistic sellers are agreeing deals at 10% below last year’s boom prices.

Asking prices increased by an average of £1,132 or 0.6% over the past 4 weeks, on top of last month?s sharp rise of £4,321 or 2.3%. This increase takes the average price at which properties are marketed almost back to the record level seen in summer 2004, wiping out all but £1,236 of the declines that have occurred since then.

The average asking price for a home in the UK stands at £194,962, an increase of 0.6% since February 2005.

Commenting on the news, Miles Shipside, Rightmove?s commercial director said: “In the second half of 2004, sellers began to trim asking prices in response to slowing market conditions, as buyers reacted to the Bank of England?s successive rate rises. However, it was not a big outbreak of common sense, and asking prices only fell by a total of about 3.4% from the peak of £196,198 to the trough of £189,509. Since New Year, over-optimistic sellers and estate agents competing for market share of new instructions have pushed asking prices up again.

At £194,962 it?s now back at the levels seen in late July 2004, before the last base rate hike. It defies the commercial logic that over-supply should lead to more competitive pricing”

First Time Buyers
The outlook for FTBs looks positive also. Rightmove said “Gordon Brown?s budget measures will be welcomed by many first time buyers, particularly away from London and Southern England. In regions like the North, North West, Yorkshire & Humberside and East Midlands, more than a quarter of properties are now on the market at prices that fall below the stamp duty threshold, giving first time buyers plenty of choice
of ’stamp duty free homes’ ? over 60,000 are advertised on Rightmove.co.uk.

“This tax break should help stimulate first time buyers, and act as a domino effect all the way up the market in less expensive regions. One agent reported that he was able to ‘rescue’ 3 sales on budget day after Mr Brown’s announcement of a sweetener for budget home buyers.”

“In expensive areas like London and the South East, however, first time buyers can find little to buy at less than £120,000 and the measure will have little or no effect. Just 2% of homes in the capital are priced at £120,000 or less ? while in a healthy market over a third of househunters are first time buyers.”
-