House price 'spring bounce' as average asking price hits £236,939 - or £455,159 in London

Published 19th Mar 2012

The biggest 'spring bounce' in house prices for six years has sparked hopes the property market will strengthen in 2012.

The average asking price rose to £236,939 in March, up 4.9 per cent rise in the year so far, equal to the largest first quarter rise since 2004.

London prices, boosted by interest from foreign buyers, were typically £455,159, up 7.3 per cent year-on-year.

And in the borough of Kensington and Chelsea, asking prices hit the £2million barrier for the first time - at £2,000,120.

All ten regions in England and Wales saw monthly price rises for March, up 1.6 per cent month-on-month on average. However, some - the Midlands, North West and Wales - saw prices dip compared to last year. The West Midlands recorded the biggest annual fall, with prices dropping 2.9 per cent to £181,925.

Miles Shipside, director of Rightmove, said: 'The traditionally buoyant spring market has combined with a shortage of supply and brisk turnover of property.

'The result is another new record for average asking prices in the capital this month, representing an increase of nearly £600 a week over the last year and underlining London's continuing property market strength.'

But Rightmove cautioned that the recovery remains patchy and transaction levels are still low.

It is not great news for first-time buyers who face a 'double blow', with the ending this week of a two-year stamp duty exemption for homes costing between £125,000 and £250,000, combined with asking prices for their target market of terraces and flats being around 3 per cent higher than a year ago.

Shipside said: 'For a first-time buyer it's already hard enough to raise the necessary deposit and now, as well as potentially losing between £1,250 and £2,500 in stamp duty exemption, asking prices for their property types have increased by over £5,000 in the last year as well....

'The question is: can the Chancellor afford to spring a surprise and extend the stamp duty exemption?'

The recent launch of the Government's NewBuy scheme to help people looking to buy a new-build home may help counteract the removal of the stamp duty concession, but it was of 'little consolation' to those looking to buy and sell existing homes.

Rightmove's research showed that 52 per cent of first-time buyers intending to buy in the next 12 months have managed to save between £15,000 and £40,000 for a deposit.

Shipside said: 'It's a kick in the teeth if you have saved hard, or begged and borrowed a meaty deposit and have just missed out on the bonus of avoiding stamp duty. There's the hope that sellers will take a lower offer to compensate, but that pre-supposes they can afford to do so or there is not a cash-rich investor buyer waiting in the wings.'

He said that with potentially fewer active first-time buyers in the market after the exemption ends 'there will also be concern for the two out of five sellers currently on the market in this price bracket'.

Source: ' ThisIsMoney '

View All Latest Articles