House Price Rise biggest increase of the year Article Published: 16:15 12/11/2009 Article Classification: United Kingdom
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This month’s 2.8% increase was the largest recorded this year and pushed UK housing prices up by an average of £6,188. The increase was driven by a lack of available stock on the market, with the average number of listed properties now 39.1% down on October 2007 according to Rightmove.

The evidence of low stock and increasing prices suggests we are in a seller’s market where demand is outstripping supply; however given the current market conditions this is rather unusual. Rightmove’s Commercial director Miles Shipside comments: “It’s a little bit crazy to have a sellers’ market given the time of year and the warnings of imminent fiscal austerity by all the main political parties. Agents in the north as well as the south are reporting that quality properties are often selling within the week. Buyers are ready to pounce on new instructions and are willing to proceed as they believe prices have bottomed, and more are finding the ability to put down the larger deposits required to access the best mortgage deals”.

Despite some positive signs, with prices stable or increasing across the country and mortgage availability easing slightly, Shipside believes that there should still be a note of caution within the UK housing market: “Sellers in popular areas are back in the driving seat, though they should watch out for icy conditions ahead, as the market is likely to enter a pre-election freeze by spring next year”.

With an election on the horizon, a potential change of Government always adds uncertainty to the property market, a fact often forgotten with elections several years apart. The stakes are higher this time round with unprecedented Government intervention in the banking and lending sector. Ministers and shadow ministers returning to Parliament following the party conference season must think very carefully about the likely impact on the housing market of short and medium term decisions. Of particular relevance to the housing sector will be:

Stamp Duty and VAT – Stamp duty holiday due to end, and VAT due to rise on January 1st,  giving aspiring and existing home owners less funds for house purchase

Election – Hesitancy in housing market activity before and after election

HIPs – Sellers may decide to hold off marketing if they anticipate a change of Government will reduce the requirements and costs for Home Information Packs

Austerity – The effect of post-election fiscal tightening on people’s housing decisions and needs

There were notable regional differences in the HPI throughout the UK this month. The London market saw the largest growth, taking average asking prices up to highest Rightmove have ever recorded in the capital at £416,157 beating the previous record of £412,731 in November 2007. There were further large increases in the South East (3.0%) and North West (2.5%), while only two regions witnessed a fall in the average asking price with prices in the North and East Anglia both dropping by -2.5%.

To read the full HPI for the UK this month, click here.