Rumours of a house price collapse have been greatly exaggerated, says Rightmove in their May housing report out today.

The housing market continues to make steady progress, and the increase of 4.7% in 2003 to date equates to an annualised increase of over 11%, the report says.

And the northern part of the country is leading the way with increases for the month of over 3%.

Year-on-year growth in house prices continues to fall as the large increases from the first half of 2002 drop out of the annual numbers and the growth in property stocks is slowing down indicating a more sustainable market.

The Rightmove May figures:

• Monthly Index (Jan 2002=100) 132.9.
• % Change in Month +1.3%.
• % Change in past Year +15.6%.
• Average Property Asking Price £163,393

Rightmove says the slight decrease in prices seen in the last quarter of 2002 has not led to a longer-lasting slowdown. We have now had four consecutive months of steady and sustainable growth in house prices, while most other measures of house prices are still reporting the slowdown that we saw at the end of last year.

Prices in the first five months of the year have increased by 4.7%, equivalent to an annualised increase of 11.6%.

Following a very slow start to the year, the number of properties coming off the market has increased to match the number coming on, indicating a healthier balance between supply and demand.

Rightmove member agents report that activity is returning to the market as prospects become much clearer for both the international situation and the UK economy.

London does not share in the improving market conditions

Prices in London are down by 1% this month and by 2.3% for the year to date, with an increase of only 6.8% since May 2002. The cheaper areas continue to record the best growth, with an increase of 4.4% for the month and 39.6% for the past year in the North of England.

Regions

There are very wide variations in the property price levels between different regions. In London, 8.8% of properties are now priced at over £500,000 compared with only 0.6% in the North of England, where 22.9% are still under £60,000. Overall, only 3.7% of properties are now priced at under £60,000 and so exempt from stamp duty, and 23.4%, nearly a quarter, are in the higher stamp duty bands that start at £250,000.