August House Prices Index shows drop in asking prices
The House Price Index from Rightmove, the biggest online property portal in Britain, showed the biggest ever fall in asking prices in August, and cited “Summer Sales” as the key reason.
The dip of just under 3% (equivalent to a drop of just over £7,750) is the most significant the website, which provides the biggest sample each month of house prices, has ever seen in the holiday month.
It was the third month in a row the prices fell in London, by 59%, no doubt a key driver behind the figures. But the portal says holidays have been another contributing factor.
The average monthly price fall at this time of year over the last decade has been 1.6%, so August is traditionally one of the quieter months.
But, this year, the drop could herald a slower market in the final months of 2014. Overall, the figures mean the average property asking price is down 2.9% to £262,401.
A director at Rightmove said: “New seller asking prices are good for showing market mood, and those who’ve just put a property up for sale appreciate that summer can be slower, and need to be enticed to buy with lower prices.
“While you expect things to be slower in August, but it’s been steeper than expected this year.”
The fall last month will have a significant impact on the yearly rate of increase, however asking prices from new sellers are still more than 5% higher than they were this time last year.
The biggest year-on-year rise of 2014 was in May, at 8.9%.
The fall in demand from buyers, and a rise of 8% in numbers of homes being put on the market in August (when compared with the same month last year) has meant greater competition for vendors, but is good news for buyers, who may well be able to find they secure a good deal.
“This is not a massive price drop drama, but we expect more September produce dips before the usual autumn activity.”
The director added that while the Bank of England would no doubt be “relieved” at these signs of a natural slowdown in the market, which has happened without a rise in interest rates.
Nonetheless, most of us are aware that the five-year holiday of rates at a record low cannot last for ever.
Written by: The Team | On: August 7, 2014