Housesellers asking prices have hit record highs for three months in a row as confidence flows back into the market.
Prices rose by 0.3% month-on-month in July to reach a new peak of £253,658 on average, completing a hat-trick after records were also set in May and June, property search website Rightmove said.
The website reported evidence of a ‘broader-based recovery’, with prices up annually in all regions across England and Wales - the first time this has happened in nearly three years.
New sellers are asking around 4.8% more for their homes than they were a year ago and London asking prices have soared by 12% annually to reach £515,379 on average.
The West Midlands and the North saw the smallest year-on-year rises, of 1% and 1.2% respectively. Meanwhile, asking prices are up 2.4% year-on-year in Wales.
The latest study will fuel concerns that Government efforts to kick-start the housing market could lead to a “property bubble“, with mortgage borrowers trying to stretch their finances too far. Sellers’ asking prices have risen every month this year.
Rightmove, whose records go back to 2002, said it is doubling its forecast for house price increases over this year from 2% to 4%. Several other experts have also revised their predictions upwards amid signs that Government schemes to boost market activity are having an impact.
It expects London to continue to out-perform the rest of the country and the South East to maintain its ‘strong momentum’, driven by an ongoing shortage of homes for sale which has the effect of strengthening competition among buyers.
However, northern regions may struggle to maintain increases over the course of the year, it said.
The Council of Mortgage Lenders (CML) reported last week that first-time buyer numbers have reached their highest in five-and-a-half years and a recent Halifax study found that one in four people expect house prices to lift by at least 5% over the next year.
Rightmove’s own consumer confidence survey found that almost two-thirds (62%) of people expect prices to be higher in a year’s time, which is double the 31% who said this a year ago.
Miles Shipside, director of Rightmove, said: “Consumer confidence is key to the market and there has finally been a year of minimal bad news, with a reasonable amount of good, after four years of doom and gloom."