News

House agents mark up the price on spring boom hope - By Gabriel Rozenberg (Economics Reporter)

The Times (Business Section) - 21st February 2005

Optimistic estate agents have put asking prices up sharply in expectation of a spring recovery from the housing slowdown; figures released today suggest.

Asking prices rose by 2.3 per cent this month, the biggest increase since last June, according to Rightmove, the property website.

Analysts predicted that house prices are set to rise over the next few months after a seasonal drop in activity during December and January, When prices fell by 0.3 per cent and 0.1 per cent, respectively.  Last week the council of Mortgage lenders reported that the number of mortgage approvals had fallen to its lowest level in six years.  However, there were indications that estate agents may have rasied prices too much this month, after surveys showed that buyer demand has dropped significantly.  Right move said that inexperienced estate agents were failing to price realistically and were gambling on the market recovering.  Miles Shipside, commercial director of Roghtmove, said:  "Asking prices have risen this month, as is typical of the last few years, but it's not a typical year that sellers and their estate agents have become accustomed to.  Activity levels have been really low since summer last year."

The everage rise of £4,321 took the annual rate of house inflation to 11.1 per cent, up from 10.9 per cent last month.  The length of time that houses remain on the market declined from 87 days to 85.  The price rise was highest in the North West and the West Midlands, at 5.9 per cent and 4.9 per cent, respectively.  However, asking prices in the North of England fell by 3 per cent, Rightmove found.  All types of property saw an increase in asking price.  The strongest recovery was in higher-value houses, which is seen as an apparent signal that the market remains weaker among first-time buyers.

HSBC PAYS 8%

HSBC today launches the UK's highest-paying savings account, offering 8 per cent interest on its Regular Saver Facility, Which is open only to customers with a current account at the bank.  The 8 per cent rate is paid on balances of up to £3,000.  Interest on HSBC's current account remains at 0.1 per cent.