UK property asking prices fell for the second month in succession as the market was hit by over-supply and subdued activity in the summer holidays. The research by property website Rightmove, found sellers trim asking prices slip by 1.7% during the month to August 7. This sent the average asking value down £4,091 to £232,241.
This comes after RICS last week reported a house price fall for the first time this year. However, the Rightmove fall is at odds with Halifax’s contradicting report that house prices were up 0.6% in July. Rightmove found that there has been a surge in sellers with the imbalance in supply and demand compounded as many house hunters take summer holidays. The amount of available properties per agent rose to its highest August level for three years, up 41.3% on a year earlier to 29,220 a week. Rightmove warned market conditions ‘bear some similarities’ to the torrid second half of 2008 when the credit crunch left prices plunging by 7.1% as agents struggled to shift stock.
Rightmove stressed August was one of two months in the year that traditionally see price falls due to the holiday season, while figures showed values were still higher year-on-year, up 4.3%. But the latest monthly fall in prices follows a 0.6% drop in the previous month, to 7 July, and marks the biggest slide so far this year.
Ongoing restrictions in the mortgage market are hampering buyers, Rightmove added, causing limited demand. It said while numbers of actual buyers are dwindling, it saw an all-time high of daily activity on the website earlier this month.
Miles Shipside, director of Rightmove, said: ‘There needs to be a spur to cause prices to rise. However, as mortgages won’t become available to the masses and last year’s stock shortages show no sign of reappearing, we can’t see it happening during the remainder of 2010.’
A regional breakdown of the latest Rightmove data showed the West Midlands saw the biggest fall in asking prices, down 4.4%, followed by London with a 4.1% drop. Prices rose in the North and East Midlands, by 2.6% and 1.5% respectively.