Falling residential prices in England and Wales
Residential property asking prices in England and Wales fell for a third consecutive month in September and have lost half the gains they made in the six months of the year, according to figures published today, Monday, September 20, 2010.
Prices fell 1.1% this month on top of falls of 1.7% in August and 0.6% in July, the data from the property website Rightmove shows. It now means that the annual rate of growth has fallen from 2.6% from 4.3%.
Most commentators have been blaming increased supply and nervousness ahead of large government spending cuts for the falling back of the UK real estate markets.
However, supply pressures eased in September, according to the Rightmove report, with the number of properties coming on the market falling to its lowest since April. Miles Shipside, Rightmove’s director, said September’s survey could be interpreted in different lights.
‘The double dippers will be able to point to a clear downward trend, with new sellers dropping their asking prices for three months on the bounce. Conversely, we are also recording the lowest weekly run rate of fresh sellers since April. This will give some ammunition to those forecasting a flatter price trajectory as it could be an early sign of fresh supply beginning to wane,’ he explained.
It means that half of the gains made in the residential real estate market since the start of 2010 have been wiped out. Curbs on lending by banks are also blamed as a factor.
Bank of England Governor Mervyn King said last week that bank balance sheets ‘are not in tremendously robust shape’ and that this may restrain lending.
‘The surge of extra stock has left the market with a real supply hangover. Sellers’ attempts to hold onto price gains made earlier in the year have suffered from a relentless stream of fresh property,’ Shipside added.
The report also shows that the average number of unsold properties per real estate agent held at a record high of 79 in September. Seven out of 10 regions tracked by the property company showed falling asking prices, led by a 4.4% drop in the East Midlands. Values in London fell 1.5%, led by an 8.3 percent decline in Hammersmith and Fulham.
Rightmove said the weekly average of properties listed for sale in September fell to 26,000, the lowest since April. The reading exceeded 30,000 in June and July, and has held above 25,000 since March.