The supply of available property for purchase has tightened as more buyers are coming to the housing market.  There are many factors behind the increased demand in buyers including low interest rate mortgages, rising consumer confidence and warnings that interest rates may increase as soon as next year, despite some warnings of sooner rather than later.  According to Rightmove, a popular Web site property lister, some areas throughout the UK are hot spots with properties being purchased almost as soon as they are listed. 

Asking prices have increased to record highs in the last two months with a new high of £262,594 in April across England and Wales.  This is an increase of 7.3% in comparison to last year, which marks the quickest annual rate increase since October 2007.  Last month’s asking price level of £255,962 had itself set a record that had remained since 2002.  In a month to month comparison, the increase was 2.6%.

According to Rightmove, new property listings are coming onto the market at top levels.  In London, new sellers are asking £168,711 more than six and one-half years ago.  London asking prices this year are up 15.9% more than a year ago and 41.8% since October 2007.

Northern regions are not as hot on the market as in London, with asking prices still a good deal for buyers at 8.8% below what they were in October 2007 which is an average of £165,581.

Asking prices are higher this year than they were a year ago in all regions across England and Wales.  The strong demand has pushed many housing market experts to worry that as demand rises and supply falls, the prices could reach a level that pushes home ownership out of reach of many buyers. 

Miles Shipside, director of Rightmove, remarked, “Supply in much of the South is ridiculously tight, with 'for sale' board black spots in many popular locations within easy commuting distance of London.

“There are vicious circles where there is so little property for sale that few local home owners are willing to come to market to trade up, exacerbating the shortages and boosting sellers' pricing power.

“While there are some hot spots emerging in the North, the momentum is not nearly as fast-paced and the better match between supply and demand means that the market is running at more sustainable levels.”

"Because of this, buyers who had once focused upon properties in one particular area are more and more likely to have to expand their search."