Property asking prices decline in August
Despite pent-up demand for properties in the UK, home sellers lowered their asking prices in August more than at any time in the last eight months, according to the UK’s leading residential property website Rightmove plc.
[UKPRwire, Fri Aug 21 2009] Despite pent-up demand for properties in the UK, home sellers lowered their asking prices in August more than at any time in the last eight months, according to the UK’s leading residential property website Rightmove plc.
After a slight rise in July, the average cost of a home fell 2.2% this month, to £222,762. Prices in London fell by an average of 3.8%, with the sharpest decline seen in Haringey, at 7.6%, and a 6.1% fall in Islington.
The 2.2% fall mirrors the fall last August of 2.3%, said Rightmove, and is more indicative of the summer season than evidence for further falls this year, which has so far recorded price rises in five out of seven months.
The main obstacle to further rises is the continuing squeeze on credit and “restrictive lending criteria put in place to ration mortgages given the lack of funds available to lenders,” said Miles Shipside, Rightmove’s commercial director.
On the plus side, buyers’ confidence levels were higher, with 75% of people moving home saying they didn’t expect property prices to fall over the next 12 months. And the general consensus is that the housing market is on the mend, with most recent reports pointing to stabilization in house prices. The recent RICS (Royal Institution of Chartered Surveyors) report said the property market improved in July as the greatest proportion of surveyors and estate agents in two years saw increases in property values.
Even with these signs pointing in a positive direction, it is still too early to talk of a sustainable recovery. Debt-ridden consumers are still struggling with mortgage payments – with Bradford & Bingley plc recently reporting that the proportion of mortgages in arrears more than doubled in the first half of the year – and rising unemployment will continue to hamper people’s ability to purchase homes.
“Sellers will be feeling disappointed this month as asking prices remain constrained by wider economic conditions,” said Lawrence Smith of Decision Homebuyers, “and it will be all the more frustrating as the demand for homes is clearly there. It seems they still have some waiting to do until credit conditions improve and mortage transactions begin to increase.”
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