Rightmove’s monthly price index says the average asking price of homes coming to the market has fallen 1.2 per cent in the past month - the first September price fall since 2013, and defying the ‘early autumn bounce’ expected by many.
The drop is equivalent to £3,660 off the previous month’s asking price for homes newly on the market.
Rightmove says the national average fall has very much been exacerbated by a large 2.9 per cent monthly drop in London, and smaller falls in all other southern regions. The national monthly drop when removing London would be a much smaller 0.5 per cent.
The London drop is being driven by its continued readjustment particularly in the higher-end boroughs, with falls in five out of the six most expensive boroughs this month.
“As we enter autumn it’s usual to see agents advising new-to-the-market sellers to push up their asking prices. But this year all four southern regions have seen new sellers on average asking less than those of a month ago. There were autumn price bounces nationally in 2014, 2015 and 2016, but the south of the country has turned this month into a bit of a damp squib” says Miles Shipside, Rightmove director.
“Estate agents are clearly advising many sellers that they have to lower their price expectations to fit in with buyers’ stretched financial resources, with that price compromise hopefully generating extra buyer interest.”
Shipside says that with the price of property coming to market having increased every year for the last six years, most buyers have seen their buying power eroding away. But annual average wage growth is now outstripping the annual rate of price increase in newly-marketed property.
“It’s unavoidable that prices will eventually reach a limit, and having gone up every year for the last six years, the pace of price rises for newly-marketed property is now dawdling at just 1.1 per cent. Interest rates cannot realistically drop any further to help buyer affordability, but the potentially good news for buyers’ finances, which have been under attack for years, is that there is some relief from the wage-rise cavalry” he continues.
However, the numbers of sales being agreed by estate agents are 4.8 per cent higher than the same period a year ago. All regions are rising, including London which is performing strongly at 5.6 per cent up despite its large monthly price fall.
In support of the Rightmove analysis, Robert McLaughlin - sales director at Kinleigh Folkard & Hayward in London - says: “We’ve advised sellers in many locations across London that the current market requires sensible and realistic pricing. Pockets of high demand still exist but tend to be concentrated around specific streets, schools and transport hubs.”
And Mark Manning, director of Manning Stainton in Leeds, Harrogate, Wetherby and Wakefield, says: “The market across our region experienced a fairly traditional summer slowdown but interestingly managed to outperform our results from the same period one year ago. There has been a 10 per cent increase in the volume of new seller enquiries over the last three months in contrast with the same period in 2016.”