United Kingdom asking prices drop for the first time since 2009

Xavier Trudeau
Juillet 17, 2017

More than half the unitary authority areas in England in Wales - 60 out of 108 - reported prices falling over the month.

The average price of newly-marketed property in July is nearly static, up by just 0.1 per cent - the equivalent of £312 - although this is a better performance than the June figure reported by Rightmove, which showed a 0.4 per cent fall.

Average house prices remain subdued, although the number of transactions is on the rise, according to the latest Rightmove House Price Index.

Meanwhile, average housing stock per agent was flat, at 60 in June, while the average time to sell increased by one day, to 60, which is two days longer than the same time past year.

"Price rises are muted despite high housing demand, indicating we have left the stage of the cycle where price rises exceed the rate of inflation", Shipside said.

In July, the average asking price on a property coming to market across England and Wales edged up £312 to reach £316,421. "Buyers, many of whom are sellers too, will struggle to afford to pay much more".

"Wage growth is muted, there are signs that consumer credit is tightening, and at some point there will be the first rise in mortgage interest rates for a decade or more which will come as a shock", said Rightmove Director Miles Shipside.

Consumer price inflation rose to its highest level in almost four years at 2.9 per cent in May. We're also seeing a return to the North-South divide in terms of price growth.

Despite this, prices are still up by 3.8% or £11,037 up on this time past year, however the Index shows that a North-South divide seems to have re-emerged.

Meanwhile, although house prices in London rose 1.1 per cent between June and July, and 0.9 per cent in the year to July, price growth in outer London stalled, with average asking prices sliding 0.4 per cent.

The summer holiday season is also having a dampening effect on the housing market.

"Prices are in the summer doldrums". 'Sellers coming to market at this time of year have to price more keenly as the traditionally bubblier spring selling season is over and prospective buyers are distracted by their own summer holiday plans'.

More than 45 per cent of agents' property stock was sold subject to contract - the highest proportion ever recorded by Rightmove since it began monitoring the trend seven years ago.

In a separate report on Monday, Deloitte LLP's Consumer Tracker showed confidence dropped the most in more than two years in the second quarter.

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