The Rightmove House Price Index for July records that the average asking price for a property in the UK is currently £236,332, a drop of -0.6% on June figures
With new seller numbers outstripping new mortgage approvals by approximately 5:2, the second half of the year looks set to see prices drift back to where they were at the beginning of the year as buyers get the upper hand.
An early indication of where prices are headed is new-to-market sellers dropping their asking prices for the first time this year, down by 0.6% (£1,435) this month.
Miles Shipside, commercial director of Rightmove, commented: “The number of new mortgages being approved each month is less than half the number of new sellers, with the imbalance being exacerbated by the increase of nearly 50% in the number of properties coming to market compared to a year ago.
“More aggressive pricing is now the order of the day, which means that conditions are ripe for a strong buyers’ market in the second half of 2010.
“This is likely to see the average price gains of 7% for the first half of the year wiped out by year-end, in line with Rightmove’s original forecast for the year of no net change in house prices.”
The end of spring traditionally heralds a tougher time for sellers as the market goes into recess for the summer. The 123,507 new sellers that Rightmove has recorded coming to market in this month’s index have reacted by asking an average of 0.6% less for their property than the month before.
Shipside said: “This is the first month-on-month fall in 2010, and with the likelihood of more economic pain to come, we forecast further downward pressure on new sellers’ asking prices.
“Average asking prices increased by £15,506 (7.0%) in the first six months of this year from £222,261 to a peak of £237,767 in June.
“While there will be some major variations between different local housing markets, we predict the national average will fall by a similar amount by year-end, reversing the gains recorded in the more buoyant first half of 2010.”
