Highest monthly increase for residential asking prices since 2002, says Rightmove

The average asking price for residential property in February rose to £233,252, which represents a £9,192 increase on January's average asking price of £224,060. This is due to buyer demand exceeding the supply of suitable property, and increasing housing market confidence, according to Rightmove's House Price Index report (10-Pages / 584 KB PDF).

The increase in asking prices for this time of year is not unusual, according to the report, and is known as ‘spring bounce’. Properties coming to market in the early months of the year are often the beneficiaries of a ‘spring bounce’, or increase in price, it said.

If a higher asking price is accompanied by a strong and market-wide seasonal increase in buyer activity, and finance is available to support it, then the local market accepts the increase, the report said.

Four factors which support the assertion that housing market confidence is rising are also outlined in the report.

There are more mortgage deals compared to a year ago and there is more competition from lenders, the report said. "Some agents report that this recent higher product profile from lenders has given some previously disenfranchised buyers new hope,” said Miles Shipside, director at Rightmove.

Buyers believe they currently have bidding power, which leads to their assertion that it is a good time to buy, the report said, which increases asking prices. Nationally five out of 10 buyers view property as a lower risk asset class, while six out of 10 buyers state they feel that the current market favours buyers suggesting buyer bidding-power, the report said.

Buyers have come to terms with the current slow but steady housing market and accepted it as normal, according to the report. The record January search activity on Rightmove suggests that dormant buyers are ‘springing back to life'.

In some areas upwards price-pressure is likely to be sustainable, when teamed with a shortage of new listings, which could increase asking prices, the report said.

The largest monthly jump in new seller asking prices for nearly a decade has been helped by micro-markets that have a shortage of existing and new instructions. "While the mass-market stays at home, those that have access to funding continue to be active and have spending power, resulting in this month’s big price hike," said Shipside.