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Housing market awash with unsold property

Rightmove said that this meant the decisions of new sellers to increase asking prices by an average of 1.7% (£4031) this month looked to be over-optimistic.

And it is a clear indication that the number of properties available to buy is not being matched by the number of buyers able to proceed.

Rightmove director Miles Shipside said: "With buyers still struggling to raise the necessary finance, the net result has been the biggest jump in unsold stock on agents’ books that we have recorded in nearly four years.

"While stock levels normally increase during the first half of the year, this is a larger increase than normal. With Government cuts starting to bite and interest rate rises still expected in the second half of the year, those who are serious about selling should look to price more keenly in the spring selling season."

This month, a weekly average of 28,390 properties came to market, an increase of 9% on April 2010 and up 28% on April 2009.
With the latest Bank of England mortgage approval figures showing no year-on-year growth, buyers’ inability to soak up this increased supply has resulted in the large increase in unsold stock per estate agency branch.

In May 2007 when there was last an increase in stock levels of this magnitude its impact was lower as mortgage financing was freely available and market conditions more buoyant.

It is against this backdrop of a substantial increase in available property supply that new sellers have pushed up their average asking prices to 1.7% higher than those recorded a month ago.

Shipside said: "On a positive note, the fact that many new sellers feel they have the confidence to test the market at substantially higher prices shows that the Damoclean sword of cut-throat competition from distressed sales has yet to fall on sellers’ initial price expectations.

"This gives serious sellers and in-tune estate agents the opportunity to price below their less realistic competitors and
stand out as offering better value to deposit-strapped buyers. The negative consequences for the market are a longer period of adjustment in buyer affordability and lower sales transaction volumes."

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