'Broken' Housing Market Challenge for new Government

LONDON, May 17, 2010 - The Rightmove House Price Index (
www.rightmove.co.uk/news/house-price-index) for May 2010 is released
today (Monday 17th). Average asking prices in the UK edged up by 0.7% over
the past month to GBP237,134.

The week before the election saw the highest number of new sellers coming
to market since the week commencing 28th June 2008, seemingly undeterred by
the impending election. However, the lack of buyers able to obtain a mortgage
and proceed in these uncertain times is now starting to tell in Rightmove's
statistics, with this year's unsold stock level continuing its inexorable
rise.

Miles Shipside, commercial director of Rightmove (
www.rightmove.co.uk/) comments: "We observed last month that rising
prices and more properties coming to market would be unhappy bedfellows in
the long term. This month we are seeing signs that the relationship is under
increasing stress. Sellers are starting to reduce their pricing expectations
to court the fewer buyers who are able to proceed, though the number of
buyers who can purchase is too low to bring volume back to the housing
market."

Rightmove's quarterly Consumer Confidence Survey polled potential movers
at the start of the year, asking whether the election would affect their
moving plans. A resounding 70% said it would not, and this surge of new
sellers so close to the election bears that out. Potential buyers remain in a
difficult position however, with lenders' deposit requirements and
credit-worthiness criteria still marginalising a large body of would-be
home-movers.

One of the many issues for the new Government is to review the 'broken'
housing market. The previous Government's target of 3 million new homes
(www.rightmove.co.uk/property-for-sale/new-homes.html) by 2020 was
aimed at meeting projections for growth in the number households. This target
is now in tatters, with the industry struggling to build even 100,000 homes
this year. Assisting higher new-build and resale housing transaction volumes
is likely to be an important consideration as part of a consumer-led
recovery.

Shipside concludes: "The new coalition Government faces a tough challenge
in fixing the 'broken' housing market. This may become increasingly difficult
if the Greek illness turns into a European pandemic causing a relapse in the
condition of the financial markets. There is also the looming issue of
reducing public sector spending by GBP6 billion. This will have an impact on
the financial position of thousands of employees whose jobs depend on the
public sector and a resulting knock-on effect on the health of the housing
market."

For further statistics and to download the Rightmove April 2010 House
Price Index please visit -
www.rightmove.co.uk/news/house-price-indexor search for local house
prices (www.rightmove.co.uk/house-prices.html) at
www.rightmove.co.uk/house-prices.html

Contact: Tom McGuigan - Rightmove Press Office, press@rightmove.co.uk,
+44(0)207-087-0700

Contact: Tom McGuigan - Rightmove Press Office, press at rightmove.co.uk,
+44(0)207-087-0700