Gap between asking and selling prices finally starts to narrow

Monday 15th August 2011

Asking prices for homes new to the market have fallen 2.1% in the last month, Rightmove reported this morning.

The fall follows last month’s drop of 1.6%, but there is still a huge gap between the selling prices quoted by Halifax and Nationwide, of £163,981 and £168,731 respectively, and Rightmove's current asking price of £231,543.

The drop in asking prices means that house prices are virtually identical to what they were last year and have fallen by an average of just 4.1% since the financial crisis began four years ago.

Rightmove says that low transaction levels are continuing, with the supply of new sellers 30% below 2007 levels.

Rightmove director Miles Shipside said the housing market is in ‘limbo land’, with restricted numbers of willing sellers and financially capable buyers.

He said: “It seems that this stalemate can continue indefinitely, until it is broken either by an improvement in upside factors, such as a relaxation of mortgage finance, or by a further marked deterioration in employment and a corresponding increase in forced sales at bargain basement prices.”

He added: “We are four years into this journey and it still looks like a long road ahead.”

Meanwhile, a separate report, by property search engine Home, says that average time on the market has risen by nine days to 122 days – 22% longer than August last year. If London were taken out of the equation, time on market would be even longer. In London, average time on the market is 91 days – and even that is creeping up.

The report says: “2011 is proving to be a slower and leaner year for UK property sales than 2010.”