Surprise jump in property prices

Property expert Rightmove has today released an update on the UK property market which apparently shows that property prices were pushed up by 3% in October despite the fact that the economic backdrop is difficult to say the least and the mortgage market is starting to slow down. So how can we explain a 3% increase in asking prices for properties in the UK during October?

The apparent 3% increase bears no resemblance whatsoever to the fact that a record number of houses are now for sale in the UK, the mortgage market has stalled and the UK economy is set for a very difficult period at best. While historically the autumn period does see house prices increase there is concern that if prices are pushed artificially higher in the short to medium term we could see a significant drop in the future.

There is no doubt that we are starting to see house buyers retreat to the sidelines and sellers coming to the fore. As more and more houses come to the market and fewer and fewer deals are concluded there is no doubt that house prices will soften in the short-term. Whether this eventual softening becomes something of a panic remains to be seen with the 3% increase in prices in October appearing to be totally at odds with the economic environment in the UK.