Asking prices on the rise

House prices may be falling across London but the asking figure is rising, a new survey shows today.

The figures, from a website which records and analyses asking prices as opposed to sale prices, show that across London asking prices have risen by an average 4.5 per cent over the past year and currently stand at an average of £259,586.

A spokesman for the website, Rightmove, said: "This could be the first sign of a significant pickup in the London housing market, with renewed confidence and activity starting to flow through into higher asking prices."

In some boroughs, including Hounslow and Hillingdon, the average asking price of properties is now more than £30,000 higher than it was a year ago.

In other boroughs, including Kensington and Chelsea and Hammersmith and Fulham, average asking prices shot up by more than £10,000 in the past month alone.

Experts believe the answer to the conundrum is simple. Successive reports have highlighted the fact that house prices are falling and that vendors are being forced to offer discounts to secure a sale.

So sellers are deliberately overpricing their homes, allowing them to offer generous-seeming discounts while not ending up too deeply out of pocket.

Housing economist John Wriglesworth said: "Some stores increase their prices just before the July sales so that the reductions they offer seem like genuine bargains. Something similar may now be happening in the housing market."

Another explanation is that estate agents, faced with a drop in their business of about 40 per cent, are increasing their valuations of people's homes in order to tempt them to sell.

The largest rises have been seen in Hounslow, where asking prices shot up by more than 12 per cent, from £255,281 to £287,181 - an increase of more than £30,000 - and in Hillingdon, where prices went up by more than 13.2 per cent, from £225,957 to £255,825.

Other boroughs include Barnet, where average prices rose by more than seven per cent, from £284,537 to £305,045, while in Ealing they rose more than 11 per cent, from 240,501 to 268,000.

Some boroughs experienced startling month- on- month increases. In Kensington and Chelsea, prices rose by an average £11,000 to £605,620 in the past month, and in Hammersmith they went up by an average £10,000 in the same period.

The rise in asking prices is now seen in 11 out of the 32 boroughs and Rightmove expects the trend to spread further in the coming months.