Property prices fell by 0.7 per cent in most UK regions last month apart from London which recorded an average rise of 2.3 per cent, according to the latest report from property website Rightmove.
While most areas reported a drop in house prices, knocking an estimated £1,656 off the average home in England and Wales and cutting the overall value to £239,986, prices in the capital have remained constant.
The biggest fall was witnessed in the West Midlands which saw a drop of 2.4 per cent, followed by the South East at two per cent and Yorkshire and Humberside at 1.9 per cent. And despite the average time a property sits on the market increasing from 85 days to 92 days, the latest fall in prices has helped reduce annual house price inflation to 7.9 per cent, its lowest level since June 2006.
Following a decade-long housing boom that has over-stretched house prices to the point that demand has petered out, the latest report is further evidence of a stagnating and even declining market for 2008. Furthermore banks have put the brakes on their lending thanks to the US sub prime mortgage debacle and ensuing credit crunch.
Miles Shipside, Commercial Director of Rightmove comments: “Prices are set to flatline in 2008. While we do not expect a price drop overall, there will be parts of the country that are over-priced and over-supplied for the likely levels of affordability and demand next year. In these areas, motivated sellers are starting to cut their prices and will need to be the cheapest on the street to sell. Whilst bargain hunters will be paying less for these properties, prices will rise where demand continues to outstrip supply in quality areas close to major conurbations, especially London.”
Further falls are predicted from December and January, before a period of minor price gains bump up the market later next year.
Shipside adds: “If you have to sell, then seriously consider dropping your price and taking an offer now rather than holding out. You could end up being offered even less in a few months’ time. The good news is that with many sellers still refusing to reduce substantially, a 10 per cent reduction can really stand out. In addition, these can be the best market conditions in which to trade up.”
The hike in prices in the capital has been attributed in part to the introduction of Home Information Packs (HIPS) which became compulsory for three or more bedroom properties earlier this year.
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