New sellers’ asking prices in August dropped by 2.1% over the past month, a year-on-year fall of 0.3%, to leave the average asking price for a property in the UK at £231,543. At a regional, just two areas in the UK saw average asking prices increase in August – Yorkshire & Humberside, where prices edged up 0.1%, and Wales which saw a 0.8% increase.
The falls this month mirror the post-credit-crunch pattern of falls in August that has remained consistent since 2008. However, although this is the fourth year of economic uncertainty, the average price at which new sellers market their properties remains in the same ball-park when compared to both last year and the onset of the credit crunch in August 2007. These figures show that the country has avoided the downward spiral of widespread price slashing that has been a common feature of the property downturn in many other countries with similarly highly geared housing markets.
Miles Shipside, director of Rightmove comments: “While the world’s financial jitters are now playing havoc with stock markets and our future pensions, there are bound to be concerns about the impact on assets held as bricks and mortar. While the repeated shocks to the financial system have severely limited transaction numbers compared to pre-credit-crunch levels, the last four years have seen them stabilise, with an uneasy balance developing between those that have a pressing need to sell and those that have a good reason and the capability to buy. Sellers’ initial asking price aspirations have remained remarkably stable, and in spite of the continuing global economic unrest, the UK housing market has several unique factors that should help to insulate it from downside risks”.
One of the main upside factors preventing major house price falls is that the supply of new sellers remains subdued at 30% below August 2007 levels. This lack of confidence and/or ability to come to market stops an oversupply of sellers from bidding each other down. Additionally, Bank of England base rates now look set to remain unchanged until at least 2013. As well as helping those whose finances have deteriorated to service their debts and remain in their homes rather than becoming forced sellers, it is a further boost for deposit-rich buyers. Their mortgage rates are set to remain historically cheap, helping to fund their trading-up or other housing investments.
Shipside comments: “We are four years into this journey, and it still looks like a long road ahead. The UK does not have the chronic over-supply of property seen in many other countries, due to restrictive planning laws and tight central control of local government finances, leading to low levels of new build in both social housing and the private sector. Demand for housing is high due to demographic changes, including net immigration, boosting household numbers. These factors give our housing market more balance and stability, but perversely prevent a possibly quicker but more painful route to recovery via lower prices with higher transaction volumes.”
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August 26th, 2011 at 7:42 pm
With the world having monetry problems, families going bankrupt,the younge first time buyers not being able to get on the property market, jobs going to other country folk and there wages going abroad, it all will come crashing down, businesses will collapse and recesion will return.
August 27th, 2011 at 2:47 pm
More help is needed for FTBs and I’d like to know what the government are going to do about it? I’m 30yrs old, worked full time for 13 years and I cannot afford a one bedroom flat in Sussex. I can’t even afford to rent a one bedroom flat. Surely something needs to be done to finally help the middle band of every day working people who have never taken a penny from the government (us UK public).
August 27th, 2011 at 8:38 pm
Keep it rolling… a very good article. Thanks
August 28th, 2011 at 1:10 am
For those of us that have been hoping to get onto the property ladder and purchase a property, it has become more impossible as asking prices for houses have remained high combined with many poor quality build or undesirable properties with a high price tag that makes no sense, coming onto the market. I understand this is an opinion, as estate agents seek to obtain the best price for their vendors, but not everyone is a property developer, builder or investor and most purchasers have to wait and pay for a survey that will inform them of any less that perfect characteristics of the property, by which time the estate agent has already considered the property SOLD. Is it any wonder things go wrong, who are the professionals we really trust to put a true value on a property? House prices along with inflation are too high, it is for the good of the economy and us all that interest rates should not go up. Fingers crossed then. No good saving for a rainy day.
August 29th, 2011 at 9:55 pm
Well Miles, all of that may be true, but before all of this comes to an end, and long before any real recovery really takes place, house prices are going to have to fall some bit yet, if the market is not to stagnate. There needs to be a steady, but sure correction to pricing over the coming months, in order to tempt property investors, first time buyers and those with ready cash, to take the plunge in the current uncertain times in which we live, and part with their money. My estimate as a portfolio property investor, is that prices will fall about 7% over the next 18 months. Frankly with all that is happening here and in Europe I see no alternative.- See how far I am out in 18 months time.
August 30th, 2011 at 3:52 pm
Errrr…what about selling prices?
Asking prices = irrelevant.
August 30th, 2011 at 6:44 pm
When will people STOP applying a ‘national’ answer to property values, when it is abundantly clear that there have always been, and will continue to be, regional variations. Reasons can/will be school catchment, employment/unemployment,transport links,desirability of a specific area (crime rates/ retail/leisure facilities) types of property and their condition. Wake up chaps! A good local and established agent will have his ear to the ground and is very often better qualified than our dear friends that are members of FRICS to give you as near as dammit, an accurate ”market appraisal”, and I hope there are some out there who agree with me!
September 9th, 2011 at 2:07 pm
Hello
I am looking for a home (desperately needed in about 5 weeks) I live in Cornwall, Launceston, Callington or near there would be lovely but I am open to suggestions, I have only 130.000 to spend (I am mortgage free and would ideally like to stay that way!) if you can help me at all I would love to hear from you.
Yours very sincerely
Nadien.