Homeowners put up asking prices in October

Property asking prices rose by 3.1% this month, according to Rightmove, following the customary reaction to the start of the autumn selling season.

The latest survey by the property website shows the asking price rose by over £7,000, compared with last month, despite near-record stock levels and deteriorating mortgage availability.

Miles Shipside, director of Rightmove, said: “Given the challenges of the current market, the behaviour of sellers in raising their average asking prices by over £7,000 takes some explaining. Every year, vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in a new home before Christmas”

Between 2007 and 2009, October sellers have tried higher prices in spite of the “credit crunched” housing market and Shipside said that the tactic is unlikely to succeed but is a sign that many sellers are not experiencing high levels of financial stress but can’t afford to accept a lower price if they are to make their sums stack up for the next move.

The average rise measured in October for the last 10 years is 2.0%. This year’s hike of 3.1% is the highest October rise since 2003.

According to the survey family homes are in short supply in parts of the south, especially in London where new sellers put up their average asking prices by 5% this month. This is not dissimilar to the 6.5% jump in the capital this time last year, though London buyers’ lack of choice has now been eased by a 34% year-on-year increase in new stock.

This month’s Comprehensive Spending Review is also likely to have a negative effect on housing market sentiment and challenge further any perception of pricing power among sellers.