U.K. Home Sellers Push Asking Prices to Record, Rightmove Says

Asking prices for U.K. homes rose to a record in June, bolstered by London and southeast England, Rightmove Plc said.
The average asking price in England and Wales rose 1 percent from May to 246,235 pounds ($384,800), the operator of Britain’s biggest property website said in an e-mailed report today. That’s the highest since Rightmove began the survey in 2002. Prices in London jumped 1.7 percent to a record 477,440 pounds.

Further gains in values may be limited as the worsening debt turmoil in the euro area undermines consumer confidence and pushes up bank funding costs. Bank of England Governor Mervyn King said last week the crisis is casting a “long shadow” over Britain’s recovery as he announced measures to boost bank liquidity and try to lower borrowing costs.

“It is likely we have seen the last of record asking prices for the remainder of 2012,” Miles Shipside, commercial director of Rightmove, said in the report.

Rightmove also said there was a surge in sellers coming to the market before the public holiday this month for Queen Elizabeth II’s Diamond Jubilee. That suggests “further increases in asking prices are unlikely as fresh supply exceeds summer demand,” it said.

Of the 10 regions tracked by Rightmove, six recorded monthly increases in prices in June, according to the report.

From a year earlier, average house values in England and Wales were up 2.4 percent in June. In London, the annual increase was 8.8 percent. The monthly gain in the capital was led by Camden, up 3.1 percent, as well as Wandsworth and Kensington and Chelsea.
Consumer Spending

Separately, Lloyds TSB said the squeeze on consumers’ finances is continuing, with discretionary real spending power falling by 0.3 percent in May from a year earlier. For households, that means they had on average almost 34 pounds a month less than a year ago to spend on non-essential items, Lloyds said in a report.

U.K. inflation probably remained at 3 percent in May, economists said before a report on June 19.

“Weak income growth and stubbornly high inflation is ensuring that the squeeze on consumers is remaining in place longer than many thought it would,” said Patrick Foley, chief economist at Lloyds. “The benefits of falling inflation on consumers’ spending power will be limited until we also see a stronger economy and faster growth in incomes.”