October 18, 2010 07:29 ET

October Sellers Struggle to Adjust to New Market Norms-Rightmove House Price Index-October 2010

LONDON, ENGLAND--(Marketwire - Oct. 18, 2010) - The Rightmove House Price Index for October 2010 is released today and reveals that the average asking price for a property in the UK increased by 3.1% in the last month, a year-on-year increase of 2.9%.

Given near-record stock levels and deteriorating mortgage availability, an October asking price increase of 3.1% is seemingly illogical. However, bullish pricing is a normal reaction to the start of the autumn selling season after the summer holiday period. New sellers and their estate agents have an inbuilt instinct to increase prices every October – which has happened every year since the inception of Rightmove's House Price Index in 2001. This is the fourth October since the start of the credit crunch and their behaviour has still not changed, illustrating how firmly rising house prices are embedded in the UK home-owners psyche.

Miles Shipside, director of Rightmove, comments: "Given the challenges of the current market, the behaviour of sellers in raising their average asking prices by over £7,000 takes some explaining. Every year, vendors coming to market after the summer holidays hope to take advantage of any positive price impetus from buyers who are keen to be in new homes before Christmas. Between 2007 and 2009, October sellers tried higher prices in spite of the 'credit crunched' housing market, and it's a habit that is proving hard to kick in the 'spending review' market of October 2010. It's not likely to be a successful tactic, though it is a sign that many sellers are not experiencing high levels of financial stress but can't afford to accept a lower price if they are to make their sums stack up for their next move".

This month's Comprehensive Spending Review is likely to have a negative effect on housing market sentiment and consequently challenge further any perception of pricing power among sellers. However, as the full details of the cuts are not out in the marketplace yet, perhaps those more ambitious sellers are able to ignore their possible impact and see little reason not to follow historic trends and price optimistically. Furthermore, May's suspension of Home Information Packs means that there is now no up-front cost commitment required from speculative sellers who wish to test the market at whatever price they or their estate agent are willing to try.

For further statistics and to download the RightmoveOctober2010House Price Index please visit - http://www.rightmove.co.uk/news/house-price-indexor search for local house prices at http://www.rightmove.co.uk/house-prices.html

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