Fresh property continued to flood onto the market in London over the past month, creating some downward pressure on new sellers’ asking prices. This month they have reduced their price aspirations by -1.7% (£7,349) compared to June.
Miles Shipside, commercial director of Rightmove, comments: “With London estate agents now faced with new instruction levels 67% higher than last July, new sellers have had to give on their prices due to increasing competition from fellow property marketers”.
While there will be some major variations between the many distinct housing markets within the capital, sellers will need to continue to be more realistic in their pricing in areas of over-supply. The continuing mismatch between supply and demand accounts for only 3 of London’s 32 boroughs showing increases in their average asking prices this month.
Shipside adds: “The continuing restrictions on mortgage availability, the onset of the holiday season and a surge of new stock coming to market have taken some of the recent sheen off the performance of the London market”.
Early indications from the next quarterly Rightmove Consumer Confidence Survey, due out in August, suggest a swing to a more negative outlook on the future direction of property prices. In the April survey, before the election and emergency Budget, fewer than half of respondents (44%) believed that prices would be the same or lower in twelve months’ time. Of those surveyed so far in July, a majority (54%) now expect that prices will be the same or lower a year out, reducing for some the sense of urgency to buy.
The London boroughs of Hounslow (1.7%), Richmond (1.0%) and Islington (0.4%) were the only parts of the capital see prices increase over the past month with the remaining boroughs all seeing price falls. The largest falls were seen in Kensington (-5.2%), Haringey (-3.6%) and Sutton (-3.0%). However, measured year-on-year only three boroughs (Camden, Haringey and Havering) have average asking prices that are down on July 2009, a mark of the how far prices have recently increased in the capital.
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July 22nd, 2010 at 6:17 pm
Its a fact stock level are rising, the reason is due to the HIPS being abolished. I can see a diffrence now in a standard three bedroom end of terrace home in Harrow of 50k, as un-realistic agants and vendors refuse to believe the market has changed. One of the major factors that will dictate the next 6 months will be the mortgage market and in particular the self cert mortgages-if any are available. My prediction, we will see an influx to London of cheap labour, encouraged and assisted by the goverment and more migration, more private sector job cuts, the end results will be a continuing fall or correction in house prices.
July 27th, 2010 at 9:05 am
Anthony of PK Properties makes a valid point relating to the some of the agents not being realistic about asking prices and the correction in house price values.
I wonder whether a lot of these “agents” understand how the market will be different in the coming months. Indeed, have they read (or are they aware of) the FSA consultation document CP 10/16. The mortgage market will be constrained by the lack of funds – and why should the banks lend if the purchaser is not willing or able to put down atleast 25% of the purchase price. The banks already have substantial unrealised losses on their books relating to property loans which they need to deal with.
It would be interesting to read what other informed agents think.
July 27th, 2010 at 7:07 pm
any professional within the property industry is well aware what’s happening right now….
the crash of two years ago has merely been stalled with unsustainably low interest rates and QE. with the massive debt now accumalated, and huge public spending cuts there can be only one direction for prices.
many people (the thinking ones!) realise all of these things and that is why supply is so high.
only when prices return to trend and sensible multiples will the downward slide be halted.