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Rightmove triples house price growth forecast

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The UK’s biggest property portal has increased its prediction for 2013 house price inflation to 6%.

Rightmove’s latest house price index reveals a 9% fall in new property listings in August, coupled with a rise in the number of people searching for property, ‘priming the pump’ for a surge in average house prices this autumn.

As a result it has once more increased its prediction for UK house price inflation in 2013. In January Rightmove anticipated 2% inflation; in July it upped that figure to 4% and the portal now believes that UK property will gain 6% on average this year.

According to Rightmove’s figures, asking prices in London have already risen by 8.2% this year, but strong growth in prices is by no means restricted to the capital.

The West Midlands has seen a 6.8% increase in asking prices, the South East is up 5.6% and prices in Wales have risen annually by 3.8%.

Prices in the North remained flat while Yorkshire and Humberside saw a 1.3% fall. East Anglia saw the smallest annual increase, at 0.8%. Prices rose annually by 1.3% in the South West, by 1.7% in the North West and by 2.9% in the East Midlands.

However, according to Rightmove, asking prices fell by 1.5% in September to an average of £245,495, following a 1.8% drop in August due to a “summer holiday slowdown”.

Prices are still 4.5% higher than this time last year and have increased by £16,000 so far in 2013.

Rightmove director Miles Shipside said:

“We forecast the national average increase in new seller pricing for the whole of 2013 to be in the region of 6%, partly driven by the strength of southern markets but increasingly contributed to by the more buoyant areas of the North.”

Ben Thompson, managing director, Legal & General Mortgage Club, said:

“Consistent with other recent reports it is good to see growth in the value of prices over the course of the last 12 months, as this will contribute positively to the sentiment of consumers that own their own home and hopefully enable more property to come onto the market for sale. However on the other hand, increases in prices will be less welcome for those living at home or in rented accommodation who are saving hard to buy their first home.

“Unless you are a homeowner, it would feel strange to celebrate another price rise. The ideal balance would be to see a gentle increase in house prices over a long period of time, at or below the level of inflation and wage growth.

“In tandem we would very much want to see a significant rise in the number of new homes being built in the right parts of the UK in the right way, to ensure that housing supply meets housing demand. This would allow house prices to re-balance and normalise, and more aspirational first-time buyers would be able to afford to buy their first home at a younger age than today’s average of 37, which is distinctly sub-optimal.”

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