The average asking price rose 1.2 percent from April to 242,500 pounds. Prices in London increased 0.2 percent. On the year, the cost of a U.K. home rose 2.2 percent.
Not enough sellers are coming onto the market with realistic prices and it's the wrong tactic for the current set of market conditions. There are far fewer mortgages around; buyers are in more limited supply. It's a tough market that's likely to continue for some time.
Home values dropped in April from a year earlier for the first time since 1996, indicators based on agreed selling prices show, and Bank of England Governor Mervyn King says they likely to fall further. Banks raised the cost of their most popular mortgages to an eight-year high last month, curbing lending and making property purchases harder to finance.
Homeowners raised prices the most in the South East of England, where the cost of a property rose 4.2 percent on the month. The East Midlands and East Anglia had the biggest declines, both with a 1.5 percent price drop on the month.
In London, asking prices in the southern area of Kingston led increases, rising 3.9 percent from April, followed by the central district of Westminster, with an increase of 3.2 percent, Rightmove said. The biggest drop was in Hounslow, near London's Heathrow airport, where home costs fell 4 percent.
House prices will fall about 5 percent this year, and the number of transactions may drop 40 percent if the seizure in credit markets doesn't abate.
Banks approved 64,000 home loans in March, the lowest amount since at least 1999. The average rate offered by lenders on a mortgage for 95 percent of the price of a property, fixed for 24 months, rose to 6.94 percent in April, the highest since February 2000.
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