Housing Market: Average Asking Price 'Up 3.5%'

House sellers have raised their asking prices by more than £8,000 this month as a shortage of homes for sale restricts choice in the market.

A report by property search website Rightmove (Other OTC: RTMVF.PK - news) said the spike is the biggest for eight months with the typical asking price rising by 3.5% month-on-month to £243,168.

It suggests all regions across England and Wales saw price increases, which gives a strong hint at some life in the market after a lull during the summer.

The jump means prices are 1.5% higher than a year ago and goes some way to reversing an £11,000 drop in prices between June and September, when the Olympics and holiday season were seen as distractions.

London, which has had strong overseas buyer interest and continues to perform relatively strongly, saw the biggest monthly increase in asking prices, with a 4.8% jump taking average prices to £478,071, Rightmove said.

The South East and the West Midlands both saw 3.9% increases, while prices rose by 3.8% in the North West and by 3.4% in Wales, while East Anglia saw the smallest increase, with a 0.4% rise.

The Council of Mortgage Lenders said last week that mortgage lending to home buyers hit a two-year high in August, although it warned that it was too early to say what long-term effect recently-launched government schemes to kickstart lending are having.

Mortgage availability has been increasing since the £80bn 'funding for lending' scheme was launched at the start of August, although much of this has so far been concentrated around people with larger deposits of at least 20%.

Lenders have also toughened their borrowing criteria in recent months and Rightmove said estate agents were still reporting that mortgages are no easier to obtain.

Miles Shipside, director of Rightmove, said: "Sellers need to be mindful that the window of opportunity to sell before the traditional winter slowdown is a narrow one, and they risk being left out in the cold for months until the spring market thaw."

Rightmove said that its own research found that fewer than two in five would-be buyers say they will arrange to visit a property they believe is over-priced, even if it matches their criteria.