House prices rose in February, a sign that confidence may be returning to the market, says a new house price survey.
The average asking price of a home jumped by 3.2% in February, compared to -0.8% in January, according to the latest figures from Rightmove. However, with confusion over Home Information Packs (HIPs) lingering, the figures could be distorted by a smaller proportion of one and two-bed properties on the market than usual, exaggerating traditional February price optimism.
It is also believed that the costs of HIPs might be deterring new sellers from putting their homes on the market, and agents are testing the market by pushing prices of the properties which are for sale up to see how much buyers will pay for what is on offer.
With agents competing for only 132,000 properties for sale (compared to 144,000 at the same time last year and 155,000 in 2006), on average each estate agent has only 64 new properties to sell. Meanwhile, it is taking longer to sell homes already on agents books as many buyers are less willing to make a move in a quieter market. A typical home now sits on the market for 93 days without finding a buyer, the report found.
‘This recent rise in prices, combined with February’s interest rate cut, should fuel further optimism among both buyers and sellers, with increased activity expected over the coming months,’ commented Stuart Law, chief executive of property investment company Assetz.
Mr Law also expects to see further house price rises this spring although the Bank of England cannot afford to take its foot off the pedal.
‘Its latest rate cut is not enough to resolve the recent turbulence experienced in the market and we need to see further rate cuts to ensure this renewed home buyer confidence is maintained,’ he added.