Big cities see January price jump

Average asking prices in Wales went against the UK national trend by dropping by -0.5% in Rightmove’s House Price Index for January, as the national average saw a slight increase of 0.3%. However the big cities of Cardiff and Swansea did see a rise, by 2.4% and 6.9% respectively. New listing levels were at their lowest level for 2 years in the period measured by Rightmove’s January report, and this stock shortage helped underpin prices in areas where demand for property was high. Rightmove expects this lack of property coming to market to assist an upward trend in new sellers’ average asking prices for the next three months as it coincides with the run in to the spring moving season.

There have been signs of pent-up buyer demand in January with Rightmove recording record levels of internet traffic. For the past three successive Monday’s Rightmove have had their busiest ever day, starting on Monday 10^th January with 28.3m pages, which was toppled on Monday 17^th with 29m pages and finally Monday 24^th which saw a staggering 30m web pages of property served.  This activity pushed Rightmove up to as high as 7^th in terms of most used websites by UK users.

Rightmove director Miles Shipside comments: “This month’s price rise will come as a welcome respite to prospective sellers as they had witnessed falls in five of the previous six. The sustained period of record internet property traffic we have seen at the start of the year also shows that the prospective mass market are searching avidly to find the right buy.”

Elsewhere in the Wales market, Newport (-1.4%) and Neath (-6.5%) saw the largest monthly falls in average asking prices. However, on such low listing volumes the market is open to fluctuation. The low new listing numbers were no doubt influenced by the snowy conditions of December and it will be interesting to monitor how new listings pick up over the course of the month as the early part of the year is often a busy period across the property market. However one thing that may have a negative impact on the market is the rise in VAT, in particular those looking to make a financial commitment in the already challenging first-time buyer, terrace, flat or semi-detached markets.

Shipside adds: “Everyone now sees less money in their wallet as a result of the VAT increase and so stability in base rates for the majority of 2011 is very important if we are to avoid the destabilising effect of increased repossessions and encourage greater transaction volumes.”