Annual increases slowed slightly with estate agents reporting house prices on average 10.9% higher than twelve months ago and 0.2% lower than last month.
Buyers’ market
As prices begin to steady, the market looks like it is beginning to shift in favour of buyers. Sellers found themselves having to accept less than their asking price, as homebuyers achieved an average discount of 3.5%, further indicating that the high asking price levels seen so far this year will not be maintained.
Business still busy
The number of transactions carried out in the month rose 12.5% from the previous month to an average of 18 per agency. This increase in activity was also reflected in the number of homebuyers and properties on the books at the average agency, both of which increased, resulting in a buyer to property ratio of 12:1. The high number of people still looking to move homes provides no evidence for any impending crash in prices.
First timers struggling
The slight levelling in price was not enough for many of those at the bottom of the market as the number of first time buyers fell to its lowest level this year. Average prices proved too out of reach for many of those looking to get on to the property ladder. In addition, first time buyers are exercising more caution, avoiding buying at the peak of prices in hope that the steadying of the market will lead to more realistic levels.
Lettings cooling
Rental levels are up on June 2003 by an average of 2% but look to be following the same pattern as sale prices, steadying into the second half of the year. Agents are reporting a slight decrease in average rents from last month, down 0.1%. As expected at this time of year, the number of vacant properties increased slightly from the previous month (up 4.6%) as student lets became void over the summer break.
Market turning
Richard Hair, President of the National Association of Estate Agents, commented:
“The market is definitely turning as the natural levelling out we have been expecting starts to take effect. As prices stabilise and buyers exercise more caution, sellers are having to face the prospect of a more balanced market. This will affect prices further and we can expect more changes next month. Although nothing drastic, the market is correcting itself to more sensible levels.”
