U.K. Home Sellers Raise Prices as Market Confidence Improves

By Brian Swint

Sept. 21 (Bloomberg) -- U.K. home sellers raised asking prices in September as confidence in the property market improved and the supply of homes dwindled, Rightmove Plc said.

The average cost of a home increased 0.6 percent to 223,996 pounds ($364,000) after falling 2.2 percent in August, the owner of the U.K.’s biggest residential property Web site said today in a statement. Price gains in London, the southeast and East Anglia outweighed declines in the rest of England and Wales.

“Confidence is up, stock is down and the number of people searching is high,” Miles Shipside, commercial director at Rightmove, said in the statement. “The recession appears to have hit prices harder in the north.”

The U.K. property market is showing signs of recovery as the country emerges from the worst recession in at least a generation. The Bank of England this month kept the benchmark interest rate at 0.5 percent and maintained a program to buy bonds with newly created money to stimulate the economy.

Prices increased on the month by 0.9 percent in London, 1.5 percent in the southeast of England and 8.4 percent in East Anglia. The biggest decline was in Yorkshire and Humberside, where the average price of a home fell 3.6 percent.

There are some signs that banks are becoming more willing to lend money and that demand for home loans is increasing. U.K. mortgage approvals by the nation’s six biggest banks increased to the highest this year in August, the Bank of England reported last week.

Good Time

Surveyors reported more gains in home values than declines for the first time in two years, a report by the Royal Institution of Chartered Surveyors showed on Sept. 15. A majority of Britons say now is a good time to buy a home, a survey by the Building Societies Association showed last week.

The recession may also be easing for companies. An index showed 0.09 percent of U.K. companies failed in August, the lowest level this year, Experian Plc, the world’s biggest credit-checking company, said today in a separate report.

Unemployment is at the highest level since 1995 and central bank Governor Mervyn King said last week that joblessness will keep rising even after the economy starts growing again.

Andrew Sentance, a Bank of England policy maker who said last week that the economy may be turning around more quickly than he had expected, will deliver a speech today in London. The next interest-rate decision is Oct. 8.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.