UK house price inflation picks up

Sellers of residential property in England and Wales hiked their asking prices by an annual 5.8 per cent this month, a survey showed yesterday, despite a glut of properties on the market and forecasts for a slowing economy.

February's acceleration in asking price inflation is the first since October, property website Rightmove said, after the annual rate hit a two-year low in January of 3.4 per cent.

The pick-up in annual price growth goes against the grain of most house price surveys which have been showing a marked cooling in the market. Most economists expect house prices to fall this year by as much as five per cent.

Houses are remaining on the market an average of 93 days, compared to 78 days at this time last year, Rightmove said, covering mid-January to mid-February.

The report noted that the introduction of a requirement to provide Home Information Packs has meant less one and two bedroom properties on the market, distorting prices upwards.

The average asking price in February was £237,856, a 3.2 per cent increase on the previous month. The survey's monthly data is not seasonally adjusted, and the report notes sellers traditionally up prices at the beginning of the calendar year.

The Bank of England has cut interest rates fifty basis points since December to 5.25 per cent, but increasing evidence of an economic slowdown has reduced the likelihood of further cuts in the near future.

"The interest rate cuts have no doubt given some sellers headier hopes," Rightmove's Miles Shipside said. "These are likely to prove unwarranted, given the higher level of existing property that is already on the market and the length of time that it has been there," he said.