Miles Shipside, commercial director, said: "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."
As well as the largest rise seen in October since 2003, 2.8% is the biggest rise measured in any month since February 2008’s 3.2%.
A rise of this magnitude is more commonly seen in spring, when market optimism combines with demand fuelled by winter inactivity. Following last autumn’s acute shortage of transactions, the market has seen gradual recovery throughout 2009.
Mortgage approvals have grown year-on-year from circa 32,000 a month to 52,000, yet the supply of properties coming to market has not seen corresponding growth, resulting in upwards pressure on prices. This month sees national average asking prices at a higher level than a year ago, the first time Rightmove has recorded a year-on-year increase since June 2008.
The 0.2% rise is led by a strong recovery in London, where property shortages and increased buyer demand see asking prices now the highest Rightmove has ever measured. They are 0.8% above their peak of November 2007 and 5.2% higher than this time last year. Lack of fresh stock is the driving factor behind this record high, with 16,808 properties coming to the market this month, failing to keep pace with the 19,890 coming off.
Shipside said: "London generally leads the country out of property recessions, as underlying demand remains strong in the capital city. Agents report a frenzied market in the best locations with supply at a premium, and buyers competing hard. Opportunities to buy cheaply in one of the most popular capital cities of the world may come along once in a decade. With prices lower due to the financial jitters in the City, combined with the weakness of the pound, foreign buyers are on a shopping spree."
However, there was a warning about political issues affecting the market over the next few months.
Shipside said: "Political uncertainty can cause a period of slower activity in the housing market, and there appears to be a lot more at stake at next year’s general election to make would-be movers pause for thought. Now could be a good time to sell, as the spring market could be curtailed by pre-election paralysis, with the post-election market dampened by the next Government having to implement its austerity package."
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