Asking price up as UK house market gains confidence

Renewed confidence in the British housing market has prompted the biggest monthly increase in the asking price for a decade.

New sellers this month helped increase average asking prices by 4.1 per cent, the highest monthly jump since April 2002. The average property asking price climbed to £233,252 ($440,000) in the month from £224,060 in January, according to the latest Rightmove House Price Index.

The growing optimism in the housing market last month was echoed by improving sentiment over housing finances.

The latest figures from the benchmark Markit Household Finance Survey reveal the slowest deterioration in finances since December 2010, as the index reading climbed to 38.7 this month.

Although any reading below 50 indicates a deterioration, Markit concluded that it demonstrated "lower inflation perceptions and a corresponding weakening of the squeeze on the household spending power [that is] lifting the gloom at the start of 2012".

Miles Shipside, director of Rightmove, also sees growing evidence of increasing confidence in the housing market, although this month's asking price hike was driven by the wealthier end of the spectrum.

The survey follows upbeat news from estate agents last week that showed the number of house sales edged up this month as first-time buyers rushed to beat the end of the Stamp Duty holiday in March.

However, the research from the Royal Institution of Chartered Surveyors showed estate agents reporting that house prices continued to drop across the country.

Two areas have experienced house price inflation in the past five years, according to a recent Halifax survey. Homes in Rochford, Essex have climbed an average 1 per cent in value since 2007 while in South Lakeland in the Lake District, prices are slightly up, by 0.1 per cent.

- INDEPENDENT