Asking prices stay flat as market loses momentum |
Asking prices of properties new to the market have not risen in May – and this is the first time in a decade that this has happened. |
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Mike Jones
Today Sites, Angels Media, Angels House
Beckenham
Kent - BR3 5HZ
United Kingdom
0845 075 0152
introducertoday@gmail.com
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Asking prices of properties new to the market have not risen in May – and this is the first time in a decade that this has happened.
Rightmove says it is unique in the ten years that it has been in existence that new sellers in May have not raised their asking prices, and it warned that the market has lost its traditional spring momentum earlier than usual.
Rightmove statistics show that even as the market was going into recession, prices rose each May (0.4% in 2007 and 1.2% in 2008). Last year, asking prices rose 1.3% in May, and the May bounce has been as high as 3.2%.
Rightmove this morning reported that asking prices average £243,759 – the same as in April, when they went up 2.9%.
The site said that the market was taking ‘a breather’ as both demand and new supply reduce. Supply of new properties on the market was 10% down on April.
Rightmove also said there was a mismatch between sellers and buyers, with two in five sellers planning to trade down, outweighing the one in four intending to trade up – a sign of the economic times and changing demographics, as older people look to downsize and draw equity from their properties.
Only in London do most sellers aim to trade up. London also bucks the trend in house prices, with asking prices rising 0.9% in May to stand at £469,314, but with London agents reporting a dearth of new sellers. There have been 4,300 new properties on the London market each week in May, compared with nearly 6,000 a week in May 2007.
Rightmove director Miles Shipside said of the national picture: “New sellers asking more in May has become the norm, so it comes as quite a shock to see prices flat at this time of year.
“Perhaps the first-time buyer Stamp Duty holiday, and the knock-on activity it helped to create, has concertinaed the market’s stronger-than-expected early spring momentum into the first four months of the year rather than the usual six.
“The high rainfall in May will have been a further factor in dampening prospective buyers’ enthusiasm to get out and view property. Even if the weather forecast picks up, we have a summer of sport and celebration ahead that will provide further distractions.”
Shipside added that first-time buyers would sit on the sidelines for the next few months, and possibly longer.
The number of new properties coming to the market per week was 26,595 – nearly 10% lower than in April – with every region recording a lower supply of fresh property listings.
Rightmove said that agents have been reporting that more expensive mortgages have had a detrimental effect. Eurozone issues were another major concern.
Shipside said: “If Greece defaults, then the knock-on effects could be a further reduction in mortgage availability and weakening consumer sentiment, causing even more potential buyers to sit on their hands.
“With overall market volumes already in the doldrums, we need a fair and consistent wind of mortgage lending to prompt a speedier housing market recovery.
“Ironically, London property could become an even more popular safe harbour for foreign cash, further widening the gulf between the capital and the rest of the country.”
For more information, visit: http://www.introducertoday.co.uk/news_features/asking-prices-stay-flat-as-market-loses-momentum
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