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House Prices Slashed In Biggest-Ever Summer Sale

 August 23, 2014  /  Comments Off on House Prices Slashed In Biggest-Ever Summer Sale

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Asking prices have taken a significant hit this summer as sellers cut their expectations as supply begins to outstrip demand in the UK housing market.

The cost of the average UK property coming to the market has dropped by 2.9 per cent in the first half of August, according to the UK’s largest property website Rightmove, who say it is the biggest summer fall that they have ever recorded.

Sellers who have been aiming to cash in on the record high property values, are now beginning to discount in an attempt to attract buyers who have been deterred by talk of interest rate rises, a lack of value in the market and the imposition of stringent new mortgage lending rules.

There is now a massive glut of sellers coming to the market, with an 8 per cent increase in the number of homes up for sale compared with August 2013, and a big drop in buyer demand has forced down asking prices and catalysed the transition of the UK into a buyers’ market.

House Prices Slashed In Biggest-Ever Summer Sale

What Does This Mean

Whilst summer is traditionally a quiet period for estate agents, Rightmove’s analysis showed an unusually sharp average fall in asking prices of £7,758, a much larger drop than the 0.8 per cent witnessed in July.

All UK regions, except for the north, saw a decrease in asking prices, but London was the hardest hit with a fall of 5.9 per cent.

Prices dropped sharply in the capital for the third consecutive month as a mass of new sellers registered their properties with estate agents, but buyers turned up their collective noses at the over-inflated asking prices on offer.

The massive surge in London values over the past 12 months – a 10 per cent increase in price since August 2013 – has been caused by a buildup of demand, a comparative lack of supply, and an injection of foreign capital as wealthy international investors continue to snap up luxury homes in the heart of the capital.

“A drop in August is typical, but this year it is much steeper than anticipated. Both buyers and Sellers are becoming increasingly aware regarding personal finances, given that the cost of mortgages is going up and regulators are trying to bring availability down,” said Rightmove director Miles Shipside. “This limits what buyers are willing or able to pay and helps to moderate sellers’ price expectations.”

He also warned that the drop in asking prices could lead to a fall in actual valuations which could shock the average British homeowner who has been used to rising property prices.

Conclusion

Whilst wage growth continues to lag far behind the increasing cost of living, as revealed by the Bank of England last week, buyers are increasingly cautious about rushing headfirst into the housing market.

The data from Rightmove is backed up by a recently conducted property analysis study from the Royal Institution of Chartered Surveyors (Rics) which showed that London price growth is set to collapse in the coming months.

Bradley Shore is an experienced property and investment author. He writes for many clients such as innovo property. He has worked freelance all his writing career but would one day like a full time author position.

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  • Published: 3 years ago on August 23, 2014
  • Last Modified: August 23, 2014 @ 5:35 am
  • Filed Under: Home Improvement

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