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Down-valuations and asking price cuts spreading, warns broker

The director of a respected mortgage broker is warning that market sentiment is changing with more down-valuations from surveyors and some prices cuts.

Jonathan Harris, director of mortgage broker Anderson Harris, made the remarks after seeing the latest survey from the Halifax, which shows prices roughly stagnating. 

“The best in class properties are shifting but we are seeing a number of down valuations from surveyors as caution starts to become more prevalent. Vendors are beginning to appreciate that their homes aren’t worth as much as they thought so we are seeing price drops in some areas” says Harris.

“This is ultimately better for everyone as people who need to sell will be able to and those who want to buy will also be able to, resulting in a higher number of transactions and better fluidity in the market.'

The Halifax data reveals that house prices in the three months to April were 3.8 per cent higher than in the same period a year ago - the second month the annual figure was at this level. 

The data comes after prices in the last three months alone dipped 0.2 per cent lower than in the preceding quarter. 

The average price of a home is now £219,649.

“Housing demand appears to have been curbed in recent months due to the deterioration in housing affordability caused by a sustained period of rapid house price growth during 2014 to 2016” according to Halifax economist, Martin Ellis. 

“Signs of a decline in the pace of job creation, and the beginnings of a squeeze on households’ finances as a result of increasing inflation, may also be constraining the demand for homes” he adds.

However, on an upbeat note, Ellis suggests: “Continuing very low mortgage rates, together with an ongoing acute shortage of properties for sale, should nonetheless underpin house prices over the coming months.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, is less certain about the help given to sustaining prices by a property shortage.

“Unfortunately, low mortgage rates and a shortage of property haven’t been enough to support prices, as is reflected in these figures. But on the other hand we are quite encouraged that the annual level is still above where it was this time last year, bearing in mind the huge increase in demand ahead of the introduction of the three per cent stamp duty surcharge last April” he says.

“We are finding the market to be relatively balanced between supply and demand and still expect those people who recognise current market conditions to take advantage. The market does seem to be finding a new, slightly lower, level and we are certainly seeing no signs of a more substantial fall.”

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