Market sees modest New Year upturn
After a dramatic drop in asking prices for property in December, the January figures are much more encouraging and might even suggest a modest recovery in the housing market, according to Rightmove’s latest house price index released on Monday.
[UKPRwire, Fri Jan 25 2008] After a dramatic drop in asking prices for property in December, the January figures are much more encouraging and might even suggest a modest recovery in the housing market, according to Rightmove’s latest house price index released on Monday.
In contrast to the fall of 3.2% in December (£7,590), the January fall in the average asking price was 0.8% (£1,968). Although this fall came for the third month in a row, it indicates that prices might be stabilising and that the market is showing its usual January upturn. Furthermore, much of the monthly price drop is due to the rush to market of smaller properties by sellers anxious to beat the deadline for home information packs (HIPs), which became compulsory for one- and two-bedroom homes on December 14th.
Estate agents have also reported an upturn in activity levels, and the number of visits to Rightmove, the UK’s largest property website, was up 20% on the first two weeks of last year. In fact, last Monday proved to be the site’s busiest day on record, with over one million visits. Such indicators suggest that underlying demand remains strong, and many new buyers will benefit from cheaper-than-average properties as sellers keen to sell this winter lower their prices. Miles Shipside, commercial director of Rightmove, said, “Some homebuyers are now able to find properties that have fallen into their affordability zone, and are bagging what they see as bargains against previous prices. Some properties have had their prices dropped by 10% or more and are now within reach.”
The flat price rise forecast for 2008 should further improve affordability, as will the rise in average wages and the anticipated cuts in interest rates. Such cuts should encourage lenders to pass on the benefits to borrowers, in the form of lower mortgage rates and greater availability of funds.
“The year has got off to as good a start as could be expected after the dismal downturn of the preceding months,” said Lawrence Smith of Decision Homebuyers. “Lower prices, lower interest rates, and the spike in supply caused by the HIP deadline, all contributed to a more active market this month, especially for new buyers.”
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