Price Increase ‘Defies Logic’

Asking prices for properties have ?defied logic? by increasing for the second consecutive month, according to

Vendors using were asking for prices 0.6% higher than in February, following last month’s 2.3% price rise. The asking price of the average UK home is now just over £1,200 off the record set at the peak of the boom in July 2004.

Such surprising figures are the result of vendors being over-optimistic and asking too much for their homes, Rightmove said, as stocks of unsold properties are reaching historical highs.

According to the website?s figures, the number of houses coming onto the market over the past month is nearly double the number being sold. This imbalance, the highest in three years, has added to already inflated stocks. Estate agents now have an average of 67 properties on their books, a third up on this time last year.

The onset of spring has brought about a slight pick-up in buyer activity, as Rightmove has seen an increase in activity on its website, and estate agents are reporting higher levels of interest and increased numbers of viewings.

However, according to Rightmove?s Commercial Director, Miles Shipside, the over-supply of properties means that the market remains firmly skewed in favour of the buyer, and realistic sellers are agreeing deals at around 10% below last year?s boom prices.

Mr Shipside said: ?Since New Year, over-optimistic sellers and estate agents competing for market share of new instructions have pushed asking prices up again. It defies the commercial logic that over-supply should lead to more competitive pricing.?