Industry Sector Weekly by Lloyds TSB

Defying gravity and perhaps logic, sellers of UK residential real estate have been increasing their asking prices, but the new sense of sell-side optimism may be misplaced and contradicts the downward trend indicated by other house price indices complied by mortgage lenders. In particular, the Halifax house price index has shown quarter-on-quarter declines over the past couple of months. Seller asking prices rose by 3.1% Residential property yields look low

Defying gravity and perhaps logic, sellers of UK residential real estate have been increasing their asking prices, but the new sense of sell-side optimism may be misplaced and contradicts the downward trend indicated by other house price indices complied by mortgage lenders. In particular, the Halifax house price index has shown quarter-on-quarter declines over the past couple of months. Seller asking prices rose by 3.1% in October compared to the previous month and 2.9% annually, according to the latest release of the Rightmove house price index. While lacking any seasonal adjustment, the Rightmove data reflects a rise in new listing prices that typically occurs at this time of year. Moreover, movements in the index have been a relatively poor lead indicator for actual final sales prices. In a market, where demand is weak and sellers outweigh buyers, homes have tended to stay on the market longer before being sold, in many cases below the asking price.

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