June saw Rightmove record the sixth consecutive monthly rise in new sellers’ average asking prices, up by 0.6%. At the halfway point of 2011 price statistics are following a very similar pattern to last year, with overall gains of 8.1% (£17,984) this year compared to 7.4% (£16,303) in the first half of 2010. However, the second half of 2010 saw a steady fall in average asking prices and we predict that this pattern will follow this year.
Miles Shipside, director of Rightmove comments: “2011 looks like a case of déjà vu, with the tide of housing needs yet again failing to breach the levée of restricted mortgage funding. As the seasonal surge in demand begins to fall back, new sellers’ asking prices will also have to ebb away. With mortgage approvals stuck at half the normal level, the number of sellers who can find a buyer is likely to be reduced by a similar proportion.”
The average asking price for a property coming to market this month is £240,394, the highest figure Rightmove has ever recorded in the month of June. One of the peculiarities of this downturn is that prices in some parts of the country are at all-time highs, as there have been stock shortages in many areas where mortgageable buyers and cash buyers want to live. Overall we see a stagnant market, with mortgage levels at half those of 2007 yet a majority of sellers not having to sell urgently. This has given the market a deceptive sense of stability, though it is an uneasy balance that could be tipped into a price surge if and when mortgage finance returns, or significant price falls should the number of forced sellers increase.
Apart from a few blips, this position has remained the same for the past four years and looks set to continue in the absence of further major shocks to the banking system or wider economy. However, we expect there to be some modest downwards price pressure in the second half of this year, as average unsold stock levels per estate agency branch are continuing to rise in spite of the number of properties coming to market remaining subdued. This increase in stock levels gives more bargaining power to potential buyers, who remain active as demonstrated by record search activity on Rightmove in May.
Shipside comments: “High levels of unsold stock and record asking prices cannot remain happy bedfellows for long, so we expect to see this romp away from reality to reverse itself in the second half of the year as the over-supply of property and under-supply of mortgages reassert themselves and exert downwards price pressure. This could be good news for buyers who have been sitting on the sidelines.”
Areas with deposit-rich buyers and limited property availability are seeing active markets with prices holding steady or rising. These are more concentrated in the south and east of the country, and those regions stand out in this month’s index. All the southern regions show rises month-on-month, with London setting a new record, and the South East the highest average asking price for three years. In contrast, all but one of the six northern regions show monthly falls, and three of them have fallen year-on-year.
Shipside concludes: “The ‘wealth gap’ between the south and the north is widening, which shows itself in rising prices in the south this month, with prices going backwards in the north. However, wealthier locations in the north are definitely bucking this trend with brisk activity, and poorer areas in the south are struggling just as much as similar areas in the north. Earning power and the ability to raise a decent deposit are the deciding factors, rather than your location on a map”.
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June 25th, 2011 at 12:49 pm
hi. i have a bungalow in minehead somerset. poss think of selling my price £170 thousand but agents suggest i sell at a much lower price any suggestions?
June 27th, 2011 at 10:53 am
Not sure what you’ve already tried so please forgive me if some of this isn’t useful and just take any tips you can.
I always get three valuations from different agents. I also have a good look online to see what else people can get for their money in the same area, taking into account the exact locations (which you are hopefully familiar with). Look up sold prices over the past 5 years in the area too. This is what the buyers will be doing.
There may be other things you can do to maximise the value of your property too, such as:
*garden neat, tidy and attractive
*house tidy (put stuff into the loft/garage if necessary) or people will think there’s not enough storage
*house clean and decorated neutrally (it’s easy for the buyer to tart up the decor but most of them won’t see past what they actively don’t like)
*arrange furniture so it “feels right” and each room has it’s own identity (large furniture – like sofas – is best square-on and should be within each area, not straddling two areas if anything is open-plan)
*all repairs done, everything working properly as it should
*kitchen and bathroom – either in great shape and attractive or property will be worth less
* ask the agents their opinions on anything that needs doing before marketing, most of them are a fountain of knowledge
*bungalows can go for more sometimes if they are just what someone wants – many are bought by retirees who are downsizing and don’t need mortgages; however they are usually prudent and will also want value for their money.
*price the property right before you put it on the market or you might miss the buyer who would have completed on the sale. Ask agents – some will start prices high to see if anyone bites and reduce after a few weeks. Usually an agent who says it’s worth much more than the others you get valuations from won’t catch a buyer. There may be other tactics you can employ to generate interest.
*Always use an agent who has a presence locally and on the internet (drive around and look at the for sale boards and look at the sold properties on the internet to find the best agents at the time of selling)
*Best time to start selling process is probably May/June time (August and Dec/Jan/Feb are more difficult) though people do look, view and buy all through the year.
It is always somewhat unpredictable but hope some of the suggestions may help!
June 28th, 2011 at 4:03 am
In your report, it was mentioned that areas in the south east and east sees demand for properties and price rise. May I know specifically which areas are they?
Also mentioned that prices decline in the northern region, may I know specifically where?
Thanks