Downward price trend ends

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Downward price trend endsRightmove’s House Price Index for January found that 2011 began with the first increase in new sellers’ average asking prices for three months, an increase of 0.3% (£711) following substantial falls amounting to 6.2% during November and December. This month also offers some early indicators of potential buyer and seller activity and the property market patterns that may emerge in the year ahead. New stock levels this month are at a two year low, and we expect this lack of property coming to market to assist an upward trend in new sellers’ average asking prices for the next three months as it coincides with the run in to the spring moving season.

As well as the slight rise in new sellers’ asking prices, there have been signs of pent-up buyer demand in January with Rightmove recording record levels of internet traffic. For the past three successive Monday’s Rightmove have had their busiest ever day, starting on Monday 10th January with 28.3m pages, which was toppled on Monday 17th with 29m pages and finally Monday 24th which saw a staggering 30m web pages of property served.  This activity pushed Rightmove up to as high as 7th in terms of most used websites by UK users.

Rightmove director Miles Shipside comments: “This month’s price rise will come as a welcome respite to prospective sellers as they had witnessed falls in five of the previous six. The sustained period of record internet property traffic we have seen at the start of the year also shows that the prospective mass market is searching avidly to find the right buy.”

Rightmove’s January House Price Index reporting period also found that new listings coming to market were at their lowest level for two years, no doubt influenced by the snowy conditions of December. This stock shortage will go some way to underpinning prices, especially for areas and property-types where demand is high. It will be interesting to monitor how new listings pick up over the course of the month as the early part of the year is often a busy period across the property market. However one thing that may have a negative impact on the market is the rise in VAT, in particular those looking to make a financial commitment in the already challenging first-time buyer, terrace, flat or semi-detached markets.

Shipside adds: “Everyone now sees less money in their wallet as a result of the VAT increase and so stability in base rates for the majority of 2011 is very important if we are to avoid the destabilising effect of increased repossessions and encourage greater transaction volumes.”

14 Responses to “Downward price trend ends”

  1. A little londoner Says:

    How do you correlate ‘watching’ directly into demand? It is a useful tool for every household, not just buyers and sellers.

    In a similar fashion to the ever-increasing tweet volume – at some point ‘real tweets’ peaked and since then the majority of usage has been data-mining/ spam.

    A sweeping statement to say actual demand is rising, it looks more like negative demand as agents and sellers are looking round to compare other properties and gauge their pricing/ sell-strategy.

  2. S A Longden Says:

    You may well ask higher prices for your house, but you probably won’t get them unless you are in London which is lala land. Too many houses are far too overpriced for what they are. There may be a house shortage due to overpopulation mainly caused by immigration plus flights to the countryside by the natives, but the money supply is the same, and taxes are rising.

  3. Mark Lock Says:

    As an estate agent working in West Norfolk, we have undoubtably seen a rise in buyer enquiries in our area. In my opinion this is down to the fact there is normally a ‘back-log’ of house hunters who decide to “wait until after the festive season” to seek property. We are also hearing many first time buyers state that they feel this is the year to get onto the property ladder as property prices and interest rates are so low. We are definately seeing more and more canny buyers who have been saving hard to get a 15 – 20% deposit to take advantage of the market and interest rates and get themselves off to a good start in the property market. Investors are also looking to take advantage by taking their cash out of the bank and putting it into property where yeilds can be as high as 10-12%.
    Those looking to climb the property ladder are also seeking to take advantage of the fact that the price gap between their current home and the one they wish to purchase is so narrow.

  4. northerner Says:

    With the house I live in having been on the market for over 2 years I have reduced it from £169995 with the first recession 2008 to £149950. I have just been informed locally in Fleetwood prices are still falling and siblings whom share the ownership have dropped it again to £139950. A 7 bedroom house should be worth more than that even though it needs an overhaul???? There is no evidence of stability in the North West and more job losses on the way, I see no way of it stabilising with the lack of mortgages available, job stability shaky. In the North nearly 50% of worker work for the Government in councils, NHS, Schools, Prisons, Police, Veterans agency, CSA and HMRC. The government has given us no help financial to survive inflation nor will it as it always abandons the North West when in the hands of the Tories (and Lib dems).
    We need mortgages and the help the banks have received to be passed on to those who need to buy affordable homes at affordable rate where homes are needed. Yet as always the fat cats keep the purse strings tight to continually keep massive profits for the already rich. They borrow at 0.5% yet charge 10 times that. More housing and economic misery on the way! No boom just further bust!

  5. Roy Castleton Says:

    “PROPERTY ON THE RISE” Rubbish, check Prime Location and you will find house prices are still coming down anything from 10k to 43k the latter being Persimmion Homes at Shaftsbury! Every property in the land is totally over valued, in most instaces by as much as 50%, that is why young people cannot get on the property ladder.
    When my wife and I bought our first home in 1963 the value of monthly repayments on mortgage for a three bedroom semi detached house was 3 times the man’s wage the female wage was not taken into consideration on that basis a three bed semi should not be more than £72,000! Land is far to expensive the land cost should be only one third of the build cost.

  6. P Methold Says:

    Abolish stamp duty to get the housing market moving.

    We are already taxed from cradle to beyond the grave why should we pay the Government yet more tax when we buy a property?

    If this is too big a step to take in one stage abolish the pernicious ’stepped’ system and introduce a flat percentage rate for all property values to eliminate the price distortion resulting from the current system.

  7. Ash jay Says:

    Rightmove traffic may be up, but don’t forget that we all window shop, looking for a good bargian or just to get ones hopes up in order to feel that the property they may own will not drop any more. Prices are to high and the percentage of deposit needed is still the same, lender’s mark up is very high , the only people benefitting is those who are lending. if interest goes up in fourth coming months then we will see people struggling and repossessions up again.
    In this so called deficit reduction the middle and working class suffer the most yet, the people in the middle don’t seemed to make any noise about fianancial sitaution and the burden of property tax, rental,and in general making of money.

    The dream is gone, kate and phil may be still on our screens but remember they only show you a small percentage. developers are buying properties but rent them until such time they can off load.

    Every pound you earn is so taxed that its not worth investing in property. just an gimmick for you and I to dream a dream which burdens you with debt. forget about it maybe in 3/ 4 years time we can start to think about the next run, until regulation and the banks margin come down the banks will eat up and make money like they are now, shouldn’t woory about rightmove, zoopla just look at people’s faces and you will know that being contemp is better then the property game, which is long term about managing debt, until you get a rise in value.
    you may say that the top end is going up, of course when you have shed loads you can spend shed loads without thinking about it.

    my properties when i die will be so taxed, we worked out better to leave the kids cash. otherwise the government and banks will have you jumping like jack frost.

  8. A new divorcee Says:

    I’ve been looking at houses on Rightmove for over 2 years now, and the prices have now risen beyond what I’ll get for half the sale of this house. It’s catch 22 ~ because I’ll now need a new job to support myself, but where the houses are cheaper there are fewer jobs going.

  9. John Shenton Says:

    The market is effectivelty stagnant with everything trying to work against it. The new buyer entry points are too high and builders are doign nothing to alleviate this crisis. What would happen if builders took on the task of building factory built houses for a fraction of the cost but with very high quality? – The problem is greed – and yet turnover could be faster and greater meaning higher profits for builders. (Yes land costs are too high – who is holding the land…Cough esco.. The only market that can move then is the middle to top end. There are many who now wish to downsize, older home owners who have no pension left but money in their home.Those who have jobs and increasing families need to move up – the swop. The Government is closing its eyes to the fact that it’s tax is STOPPING this part of the market and again greed is the cause. If the tax shift betweeen £250K and above were less than 2percent but with bands at say half percent, the market would start moving again. Government would make more money not less and home owners would begin to spend again.
    The whole problem of revitalising the economy is the perceived need to tax tax tax instead of promoting growth in the market. Left to its own devices the market can rebalance. Driven by government and greed the market is left in a boom bubble that cannot continue.

  10. Benlp2 Says:

    Nice try….seems like you have no idea how macroeconmics works…
    Governments’ control over financial institutions is set to grow.
    Have you any idea the strict terms that are evolving on borrowings and set to be imposed with greater stringency? Claiming that one month’s increase of 0.3% (in buyers’ ASKING price no less!)constitutes an end in downward price trend is verging on deceitful..and we all know why, dont we? You’re trying to accelerate the market by infering that because there’s been a first shift, “you’d better get buying/selling” so the estate agents can make their money….

  11. gary smith Says:

    Mark Lock – you have left a typical Estate Agent response and you are all what is very very wrong with this country and why houses are NOT selling. You talk so much rubbish about property prices being so great, they are NOT great – they are anything but – in fact most properties certainly in the area’s that I have been looking at for the last year are considerably higher than the peak of 2007. For example a 2 bed house could have been purchased for £230,000 the current owners have done no work to it yet thanks to Estate Agents just wanting to keep pushing the price up they are now trying to sell over the 250 stamp threshold – for a 2 bed?? people are not stupid and refuse to pay such high figures – this on top of job security and the real state of the economy is why properties are not selling – Estate Agents get real!! If you advise sellers of their true value rather than trying to be greedy property would start selling again, you would actually make more money as more properties would be selling – instead you want property to be sky high so your commission looks better – believe me you are NOT helping if anything you have stopped houses selling. As a buyer we have so much more information to hand – we can now see exactly what people paid for their property and we can also see how much the property was marketed for – so why if someone bought their house a year ago and have done absolutely no improvement to it (confirmed by the estate agent)all they have done is live in it – why oh why do you think it is their divine right to think they can now ask an extra 20k+ for that property in a recession, verging on going into a double dip recession? especially in the current climate of the last year?? this has been going on for a few years – I have seen a shocking example of a property being on the market in the summer of 2008 for a couple of months – another Estate Agent then took the property on and it went on for an extra 25K??? Estate agents get real – you are responsible for at least 70% of houses not selling due to you being so greedy – keep the prices realistic and you will see movement and still make commission – probably more as you would sell more. You should be helping not hindering sales.

  12. Stuart Says:

    Who exactly are you trying to kid? Haha…

  13. Adrian Says:

    I am always suspicious of “average” statistics, because the mix of different property values coming on the market, or different activity levels in the regions, can significantly skew the figure. It will need at least three similar rises to give any confidence that the market has turned.

  14. Malcolm Bampton Says:

    Estate Agents promise you the earth, they are all the same ! telling you that they have have networks of offices, strong marketing etc etc etc
    Some even tell you that they have numerous investors on their books who are looking for properties “like yours” to increase the size of their portfolios and rent out. All complete fantasy !
    If it was not for the rental market producing extortionate revenue, a lot of estate agents would go out of existence.
    Estate Agents should be regulated.

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