Property shortage prompts big rise in asking prices

"Property for sale remains scarce in popular areas, but new supply to the market has to be priced at what buyers are willing and able to pay. An average increase of over £7000 may prove to be a bit too spicy for some buyers’ tastes, now that economic constraints have forced them to develop a simpler palate."

The number of properties coming to market is up by 19.8% on the same period in 2009. It should be noted that the amount of new stock in January 2009 was constrained by the introduction of the ban on marketing a property until its Home Information Pack had been prepared, and this has exaggerated this month’s increase.

New property listings are still down around 37% on the average numbers of properties coming to market recorded in the same period from 2005 to 2008. Average stock for sale per estate agent branch remains static at 63, with property in the more popular locations still in short supply.

East Anglia and the South East show least recovery in new supply, still 45% and 43% down respectively on average levels seen at this time of year between 2005 and 2008. Conversely, the North region shows supply recovery to within 6% of 2005-08
levels.

Shipside said: "Where supply remains well below historic levels, which is especially noticeable in parts of the south, upwards price pressure looks sustainable. Sellers whose research indicates there are few properties like theirs on the local market have a spring window of opportunity. Where property supply is closer to pre-crunch levels, sellers should price more aggressively having critically compared their property to recent actual sales as well as to what’s currently on the market."

Rightmove said its site traffic was a good barometer of prospective buyer intent, with January proving to be a record month.
Pages viewed were up 29% on January 2009. Mondays are the busiest days, with the post weekend period being the most popular time to search for what is available, including new listings and price reductions. For the first time, the number of visitors passed the one million threshold in a single day on 25 of January, and 17 days in the month exceeded the previous record day from August of last year.

January is the traditional time for bargain hunters to start shopping around, though with prices recovering there will be fewer bargains to be had this year, and agents and sellers may have to work harder to put a deal together.

Shipside said: "The record site activity ties in with the findings of the Q1 Rightmove Consumer Confidence Survey, where 62% of the 32,000 surveyed stated they believe it is a good time to buy. However, many of those searching are likely to have a degree of nervousness about the economic outlook, with only 11.1% of those surveyed believing that the country’s current economic conditions are favourable.

"With finance still tight, properties will have to be beautifully presented and keenly priced in order to convert this
high level of buyer interest into firmer commitment."

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