Rightmove state "Property is coming onto the market in London at record asking prices this month, at an average of £9,785 higher than the previous all-time high set only last month. New sellers in the capital have put up their asking prices every month so far in 2012, with prices now up by 6.9% in the first four months of the year."
Miles Shipside, director of Rightmove comments: "Every month so far in 2012, new sellers have been able to ask more for their properties than those of the previous month. London property prices are in an upward spring spiral setting two new price records already this year, highlighting an excess of demand over supply in popular locations".
In the last 12 months new sellers' asking prices are now up by 7.9% in London, an average increase of £33,931. This has been a strong factor in pushing the national average asking price to a new all-time high too, 0.5% above the last peak recorded nearly four years ago in May 2008. Since that last national peak, London properties have seen a 14.9% (£60,403) increase, the best price performance of any region. In contrast in the same time period new sellers' average asking prices in the rest of the country have fallen by 4.3%, highlighting the role that the 'London effect' has in the new record national average asking price.
Shipside comments: "If only taken at face value, national averages can mask varying degrees of volatility at a regional level, and these figures starkly illustrate the price pressures unique to the London property market and the role they play in setting new national price records. Property coming to market in London is nearly 15% more expensive than it was four years ago, while the rest of the country has seen a fall of over 4% in the same time frame".
London has actually seen less fresh property supply compared to the previous month, down by 5%. This is an unusual event as the spring moving season should be gathering pace, with more sellers coming to market not less. This is in contrast to the rest of the country where the number of properties that have come to the market this month is up by 8.1% on the previous month.
Shipside adds: "It is unusual for a shortage of fresh stock to coincide with the traditionally more active spring market. The net effect of this is another new asking price record for the capital as estate agents hunt for new stock to put in front of buyers vying for fresh offerings like hungry new-born spring chicks".
The national average asking price of property coming to market is now £243,737, breaking the previous record set nearly four years ago. This is £1,237 higher than the previous peak recorded in May 2008, just a few months before the game-changing collapse of Lehman Brothers.
However, the rise should not be overstated -- if prices had kept pace with inflation (as measured by the RPI) since May 2008 then they would now stand at £270,459, so they have fallen by 9.9% in real terms.
In addition, the national average asking price is buoyed by London's strong performance. While new sellers nationally are asking 0.5% more than the last record set in May 2008, those in London have found sufficient confidence to raise their asking prices by 14.9%.