How Will the Market Slowdown Affect Housing Prices?

A new report outlines the fact that house prices will need to be cut or the home will need to be heavily promoted in order to be sold.

A gulf has opened between the expectations of sellers and buyers, caused by an increase in homes coming to market in combination with the regular summer lull that has pushed asking prices down according to Rightmove.

Rightmove reports that a fall of 0.1% was recorded in the time spanning June and July, down from growth of 0.4% in the month before.

However, prices are at their highest in five years, with prices up on an annual basis by 1.4%, though this was a fall from the figure of 1.7% in the previous month.

A third of properties currently for sale have been reduced at least once, pointing to the disparity in expectations between sellers and buyers.

The highest proportion of homes for sale since 2015 has resulted from an 8.6% jump in properties for sale combined with a lack of new buyers.

According to Miles Shipside of Rightmove:

"At this time of year many potential sellers are more focused on erecting sun umbrellas as opposed to 'For Sale' signs, and would-be buyers are equally distracted by their summer holidays,

Prospective buyers will need tempting with a summer special price or a beautifully finished and presented must-have home, and sellers whose homes tick these boxes then need an estate agent with good marketing skills to promote it effectively,"

The level of sales transactions is improving over the course of the year as sales in the year to date were down by 3.9% and improvement from the 5.4% decline at the same time last year.

The results differ geographically also as London and the South saw the largest fall in transaction, with the north not declining as much.

When compared to the same time last year London and the South East saw falls of 11% and 8% respectively in the three months prior.

Brian Murphy of the Mortgage Advice Bureau, says: "This month's report suggests that asking prices have flattened in many parts of the UK, partly as a result of the distractions of sunshine and major sporting events, but also as the disparity grows between what vendors believe their property is worth at first listing, and what the market will actually stand.

...As it stands, consumer confidence currently appears to be holding steady, despite ongoing Brexit headlines, which stands us in good stead for the next couple of month across the height of the summer holidays."

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