* Average asking price rose 3.6 pct in four weeks to May 10
* Rise adds to concerns about a possible property bubble
* Asking prices in London rose 16.3 pct in May year on year
By Ana Nicolaci da Costa
LONDON, May 19 Asking prices for homes in
Britain hit a new record high in May, adding to concerns about
the speed at which the housing market is growing.
Asking prices rose 3.6 percent in the four weeks to May 10 -
the biggest ever increase for this period - to an average of
272,003 pounds ($456,900). They were up 8.9 percent from a year
ago, the highest annual rate since October 2007.
"May is a traditionally bullish price rise month, though
this year's 3.6 percent jump beats the previous May high of 3.2
percent set in 2002," said Miles Shipside, Rightmove director.
"A late Easter in the heart of the house-hunting season has
not only concertinaed the traditional hottest home-moving period
by several weeks, but also stagnated seller numbers, further
stirring up prices in areas of buoyant demand."
Britain's economy has been growing faster than most of its
industrialised peers, with the housing market standing out as it
benefits from falling unemployment, record low interest rates
and government mortgage schemes.
Bank of England officials have been expressing more concern
about the strength of the property market and targeted measures
to curb it are expected in June.
BoE Governor Mark Carney on Wednesday again said the first
line of defence against risks from the housing market would be
to restrain mortgage lending rather than to raise rates.
The data supported the picture of a potential "bubble"
forming in London while the rest of the UK was seeing more
modest price growth.
Asking prices rose 16.3 percent in May year on year in the
capital versus an average 4.9 percent rise in the rest of
England and Wales.
"London prices traditionally pick up earlier than the rest
of the country, and whilst it appears to be slowly dragging
other regions along in its wake, the difference is still very
marked," Shipside added.
The disparity between the property market in London, which
attracts cash-rich foreign investors, and the rest of the
country has prompted BoE officials to stress they do not set
policy for the capital alone but for the country as a whole.
The Bank's chief economist Spencer Dale recently said the
central bank "should be nervous" about the housing market, and
deputy governor Jon Cunliffe said it would be "dangerous" to
ignore its momentum.
Tougher rules for mortgage lenders came into force in April,
requiring stricter checks on borrowers' ability to repay their
Rightmove said the so-called Mortgage Market Review can help
temper the wider market but that London needs a "major housing
supply boost" to prevent excessive rises in house prices.
($1 = 0.5954 British pounds)
(Editing by Susan Fenton)