For new sellers in London the average asking prices were 5.9% lower than in July and across the rest of England and Wales they were down by 2.9%.
This is a record fall for the month of August, while it is usual for asking prices to fall in summer, last month’s figure seems to be intensified by a sharp drop in expectations in London. Due in large part to new sellers having to become more competitive with their prices this is because of an influx of new properties on the market meaning they have been steadily lowering their prices over the past three months in order to have a better chance of selling your properties.
It was the biggest dip from one month to the next since 2001, in England and Wales the average asking price fell by £7,750 compared with the previous month. In London, there were price drops in every borough, Wandsworth had the largest, including areas such as Battersea and Clapham that had been soaring ahead. In this south London borough prices dropped in August by £72,000 lower than in July. Although it should be noted here that prices remained 12% higher than last August.
Estate agents have always been aware that Holidays always cause disruption to the market in summer but this fall in to big to put down to a seasonal slump. We here at City Quays think that this may mark a change in the housing Markets direction. It is down to a mixture of seasonal reason and also a 20% leap in the number of properties becoming available in the capital causing the demand to be supplied a little further and thus causing sellers to rethink their prices in order to have a proper chance at selling.
I think New-seller asking prices are a great gauge of the markets present mood, and those who have put their property up for sale in the last month are obviously more aware that potential buyers are thinner on the ground and especially at this time of year and therefore they need to be coaxed to buy with cheaper prices.
We can see that across England (except in the north) asking prices are higher than a year ago, but the London property market has always been key in driving up the national average, and is now a huge reason for the current fall. With the interest rate rise looming buyers in the capital and nation wide have been less inclined to take on huge mortgagees Buyers. At the same time as this, sellers have been keen on shifting their properties before prices stall and laws change needing to cash in on their investments before it is too late to make a decent return.
We have seen that in the last few weeks, figures have suggested that the mortgage market had come back quite strongly with the introduction of new lending rules in April this year, but the most recent data as seen above suggests that the second half of this year is most likely to see a slowing down and a cooling off in price growth in the property market in London and across England and Wales.
We at City Quays expect to see more price falls next month before the usual flurry of activity in autumn, after people get back from holidays and things pick up again. The bank of England will probably be very relieved to see that the market has come to its own natural slowdown and no severe intervention, like vastly increasing interest rate was necessary on their part. Though they have made the public aware that the five-year holiday of record low interest rates is coming to an end, which has had its part to play in people being less eager to get more in debt.
At City Quays I think at some points during the past eight months, property was coming to the market and being sold within one week. However the pace has now reduced as values have reached an all-time high and we are now seeing buyers being more cautious. It is a good thing for people to be more cautious when the market is at such a high level and there was always going to be a tipping point it is plain to see we have reach it, but it has just slowed and not crashed which I think is a relief to all.