House asking prices tumble in London and South East, Rightmove reveals
(ShareCast News) - Asking prices for houses in the UK are being cut at the sharpest rate in over four years amid political and economic uncertainty, as London and the South East underperformed the rest of the UK.
The price of residential property coming to market in June dropped 0.4% compared to May, Rightmove research revealed, with the year-on-year annual rate of price increase slowing to 1.8%, the lowest since April 2013.
It was the first time sales had fallen month-on-month in June since 2009, the height of the credit crunch.
Rightmove figures are based on asking price rather than completions, so provide a good indication of the market rather than a concrete reading.
June saw a 7% rise in the number of sales agreed compared to the same month a year ago, which was the second highest for ten years.
Strong regional divergence's remained on show, with the northern average of 11% far outpacing the southern average of 3%.
Property prices in London fell 2.4% and were down 0.9% across the South East region, the largest monthly falls in the price of property coming to market in June.
First-time buyer houses - those with two bedrooms or fewer - were the fastest growing section of the markets.
Rightmove noted that the London and South East figures account for a significant proportion of the total market and have dragged down the national figure which would be in positive territory without these two slower-performing regions.
"It now seems certain that we will have continuing political uncertainty, which the housing market traditionally dislikes, and with the first fall in June prices for eight years there is no doubt that the lack of stability is a factor," said Miles Shipside, Rightmove director.
"The price of property coming to the market had increased in June in every year since 2009, so buyer confidence has clearly been affected by inflation outstripping their pay packets and current political events. However, demand is still high and markets in some parts of the country seem to be getting used to coping with instability and are still strong.
"The high levels of sales being agreed show that the underlying fundamentals are largely unchanged with high first-time buyer demand which drives movement higher up the ladder, all aided by the cheap cost of borrowing."
Kevin Shaw, national sales director at estate agency Leaders, said staff had "started to see a slight hardening of attitude from buyers so sellers need to have realistic expectations and be prepared to be flexible in negotiations".
Russell Quirk, CEO of online estate agency emote.co.uk, said while the data was only based on asking price rather than completions, "it certainly gives us a flavour of the current buyer-seller market seesaw".
As buyers and sellers' hopes of greater stability after the snap election were rather in tatters, "it is likely the market will continue to splutter where price growth is concerned".
"Although price growth is likely to remain stagnant for the rest of the year, it is unlikely that we will see any notable dips, perhaps a marginal adjustment if any," Quirk said.