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Rightmove: September asking prices drop 1.1%
20 September 2010
Conflicting evidence means it is too early to call a housing market double dip, as average asking prices fell for the third consecutive month in September but new seller numbers abated, according to Rightmove. Average asking prices dropped by 1.1% in September to £229,767, compared to a 1.7% fall in August and 0.6% fall in July. Prices have fallen a total of 3.4% in the last three months, resulting in nearly half of the 7% gains seen in the first six months of the year being wiped out. With the less active months of November and December to come, Right move said that asking prices are likely to end the year where they started and future moves will depend on the balance between supply and demand. Supply eased off in September, with the number of new properties coming to market per week in September at 26,087, the lowest rate since April this year. This was down 11% on August's figure of 29,220. The average number of houses unsold per estate agent stabilised at 79 after six consecutive monthly rises. Yet, this still equals the record high of August meaning competition for buyers remained high. Miles Shipside, director of Rightmove, said that those who believe the housing market is facing another dramatic drop in prices will be able to point towards the downward trend in asking prices and the tough competition among sellers and agents to find buyers. On the flip side, those who believe that the market is merely going through a short-term autumnal blip with prices likely to remain flat will see the low rate of fresh sellers in September as an early sign of new supply beginning to wane. Shipside said: "Whether we are bumping along the bottom of a U-shaped recovery or are about to double-dip into a W, sellers' properties will need to tick all the right boxes to sell this autumn." The easing off of new seller numbers could be attributed to factors including: the end of a backlog of speculative sellers coming to market following the banning of HIPs; the number of owners who would traditionally move before Christmas altering their strategy in the face of deteriorating finances; or interest rates remaining low enough to keep those on the verge of financial breakdown from becoming forced sellers. Shipside said: "The post-HIP party may have finished, but the surge of extra stock has left the market with a real supply hangover and falling prices as a consequence. "The suspension of HIPs coincided with the ongoing mortgage famine and the start of the traditionally quieter summer market. We could be seeing the start of a new norm, with the number of new properties to the market curtailed by more sober potential sellers unwilling or unable to come to market in this phase of the economic recovery. "The option to try for a speculative sale will not be on the menu for many as tax rises and fiscal savings make it more challenging to live within their means." Published by Mortgage Solutions
