Property Asking Prices Driven Up By False Optimism

Wed, 18 Feb 2009

False optimism on the part of home sellers has driven up asking prices for properties in England and Wales, according to property site Rightmove .

Those seeking to take advantage of the current housing crisis have pushed up the average asking price for homes by 1.2 per cent over the last month, which should be an indication that the property market is recovering.

However, Rightmove claims that the revival in asking prices reflects "falsely optimistic" hopes from those who are selling their properties, as there is a huge shortfall in the housing stock.

According to the company's latest House Price Index, the average asking price for a home at the beginning of February was £216,163, up from £213,570 at the start of the New Year.

But it said the climb was caused by estate agents putting up prices early in the year, a traditional marketing tactic.

Asking prices have fallen by 9.1 per cent over the last 12 months - the biggest fall on record - and Rightmove warned that despite the January rise it actually expects house prices to come down by a further 10 per cent in 2009.

Miles Shipside, commercial director of Rightmove, said: "'Sellers appear to have ignored their fellow homemovers' assessment of market conditions and put prices up."

"Sales are being achieved at around 25 per cent below peak prices, yet new sellers coming to market are starting out asking an average of only ten per cent less."

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