House Prices Falling In UK Market With Largest Drop Since November 2012

After years of rising house prices, it seems that the market may be slowing down, as a recent study by Rightmove shows.

Research carried out by the property website has shown that the average house price has fallen 1.7%, or £5,222 over the past month, the largest drop seen since November 2012.

Regional Differences

It is in the south of England that the greatest falls have been seen.

Following rises of nearly 40% over the past seven years, Rickmansworth in Herefordshire fell by 7.1%, Esher in Surrey 6.4%, and Gerrards Cross by 6%, making them the hardest hit areas in the UK. In London, the average asking price fell by £10,793.

These figures are supported by data gathered by the Royal Institution of Chartered Surveyors, which has found that the property market is at its weakest since 2016, with prices remaining static or actually falling across fifty percent of the country.

However, some areas have escaped the fall, with Manchester and Glasgow continuing to perform well in the market.

The average asking price for a house is now £302,023, a reduction of 0.2% compared to a year ago. Separate research from rival property website Zoopla showed that the asking prices of 37.9% of houses have been reduced by an average of over £26,000.

There are anecdotal reports from estate agents that properties are taking longer to sell.

The numbers of house viewings have fallen and the average sale time has risen to 61 days from 56 days. As a result estate agents are finding that they have an average of 52 properties on their books compared to earlier this year, when it ranged from 42-47.

The Reasons For The Fall

The fall has been blamed on two factors: what’s known in the industry as ‘buyer humbug’ syndrome, and Brexit.

The period up until Christmas is traditionally quiet, as potential buyers are reluctant to view or commit to buying a new home during the festive season. In addition, this annual event has been exacerbated by the economic uncertainty caused by Brexit.

The Royal Institution of Chartered Surveyors has described the market as being ‘in limbo’ until a Brexit deal is arranged.

Rightmove Director Miles Shipside said “New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual. Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism.”

However, it’s not all doom and gloom. For buyers, there’s a real opportunity to purchase a home and protect themselves against the possibility of falls in their property value.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said market power lies in the hands of buyers who are able to strike quick deals.

She said “It’s a buyers’ market, so you should be able to get the kind of discount that shields you from the risk of further drops in the market.”