Although the summer price slowdown continued as discretionary sellers were distracted by the heatwave and waited to market their properties; those not willing or able to wait for the autumn are pricing more aggressively by asking 1.5% (-£3,704) less than last month’s sellers.
New seller numbers have fallen by 9% on last month, to the lowest level since February this year.
There has also been a fall in new listings and a rise in search activity has primed the pump for an autumn price surge with new sellers asking for higher prices two weeks ago.
Miles Shipside, Rightmove director and housing market analyst, said: “New seller activity has fallen again this month and the lower volumes of property coming to market over the summer have resulted in price drops that seem counter-intuitive given that buyer demand is holding up.
“Improving buyer activity appears to have become even further out of sync with sellers’ appetite to come to market during the summer heatwave.”
Shipside added: “Sellers have yet to respond en masse to increased buyer demand, with the summer heatwave distracting homeowners from the recovering market and increased chances of finding a buyer and moving home. It shows that potential sellers are still cautious and a return to a volume market remains elusive. Those that think the housing market is nearly back on its feet are missing the fact that the confidence and ability to take on extra debt have a considerable time-lag, and many potential sellers require green stalks of recovery rather than just green shoots”.
While volumes of buyer transactions have begun their recovery, with the latest year-to-date transaction and mortgage approval statistics up by 8% and 16% respectively on the same period of 2012, new seller numbers have yet to react and are just 0.5% up so far this year compared to last. This month’s latest fall in fresh property supply against a backdrop of increased willingness and ability to buy is likely to result in a price surge as the ‘in before Christmas’ market gathers pace.
However, this surge will be most marked in areas and property types where demand is strongest, and properties in less sought-after areas may still struggle to find a buyer. Weekly analysis shows evidence of the start of an autumn upturn as new seller asking prices bottomed out at the end of August and started rising two weeks ago with the end of school holidays and the return of cooler weather.
Shipside said: “The autumn market is set to heat up as the weather cools down following the summer lull in fresh property supply. While prices fell during the month overall, the last couple of weeks have seen the start of a turnaround, with more sellers choosing to come to market and pitching at higher prices as momentum rebuilds.”
Ben Thompson, managing director, Legal & General Mortgage Club, said: “Consistent with other recent reports it is good to see growth in the value of prices over the course of the last 12 months, as this will contribute positively to the sentiment of consumers that own their own home and hopefully enable more property to come onto the market for sale.
“However on the other hand, increases in prices will be less welcome for those living at home or in rented accommodation who are saving hard to buy their first home. Unless you are a homeowner, it would feel strange to celebrate another price rise.
“The ideal balance would be to see a gentle increase in house prices over a long period of time, at or below the level of inflation and wage growth.
“In tandem we would very much want to see a significant rise in the number of new homes being built in the right parts of the UK in the right way, to ensure that housing supply meets housing demand.
“This would allow house prices to re-balance and normalise, and more aspirational first time buyers would be able to afford to buy their first home at a younger age than today's average of 37, which is distinctly sub-optimal."
