The supply of homes in the housing market for sale are out numbering the demand from buyers.  This usually produces a more competitive environment with sellers being aggressive to sell their property and buyers benefitting from lower asking prices.  However, in May the asking prices of new properties coming onto the market rose to a level that was the highest in the last three years. 

The Internet estate listing agency, Rightmove, reported that asking prices had risen 1.3 per cent in May from April bringing the average price to £238,874.  This is only slightly below the May 2008 peak asking price of £242,500.  Also in May the number of unsold properties available in the market hit the highest level for any month of May since they began securing data.

Rightmove reported that the average real estate agency had 76 unsold properties per branch in May which is higher than the average of 74 in April.  This increase in unsold properties comes despite there being a fall in the number of new properties that were added to the market in April due to the many holidays and the Royal Wedding.  The decline in new listings fell to 20,000 from 29,000. 

Miles Shipside, Director of Rightmove, remarked, “With new seller levels down some 30% over the extended holiday period, there seems to have been a knee-jerk reaction pandering to sellers' pricing aspirations rather than accommodating the reality of low buyer numbers.”

It is believed that many of those listings coming to market may be hopeful that the Bank’s leaving the interest rate at 0.5 per cent will bring buyers to their listings.  Yet, lending remains tight for first time buyers.  Most new purchases have come from foreign investors and landlords looking to add to their portfolios or entering the buy to let market.