House prices drop 1% but FOMO driving activity outside London

UK house prices fell in recent weeks as worries around the Brexit vote took the wind out of the property market even more than the usual summer slowdown, though fear of missing out on a deal continues to drive demand outside the capital.

The average asking price of a property put up for sale between 12 June and 9 July slipped 0.9%, down by more than £2,600 to just under £308,000, according to home selling website Rightmove.

While prices over the period were down compared to the same period in 2015, Rightmove argued these weeks were inflated by the result of the general election last May, instead comparing the data with 2014 found little difference.

Numbers of new properties coming onto the market in the two weeks pre-referendum fell 8% before rebounding 6% in the two weeks post-referendum.

Rightmove director Miles Shipside said the fall in asking prices is "within the range that we have seen at this time of year".

He added: "With the onset of the summer holiday season new sellers typically price more conservatively and the average drop in the month of July is 0.4% over the last six years.”

The biggest drop was in Yorkshire and the Humber, where new sellers were asking for 2.1% less than the previous month, while in the East Midlands average asking prices were down by just 0.2%.

Demand was perhaps more sharply hit in the post-referendum fortnight, with enquiries to estate agents falling 16% compared to 2015 but "consistent" with the level in 2014.

But Rightmove pointed out that, with available property for sale per estate agency branch 16% lower in 2016 compared to 2014, enquiries per property remain remarkably resilient.

"Agents in areas where stock shortages were driving momentum before the referendum say activity has recovered quickly, with buyers’ fear of losing a scarce property a key factor. They say that very few deals have fallen through as a direct result of post-Brexit jitters," Shipside said.

"Those areas of the country whose housing markets were struggling or readjusting earlier in the year, such as parts of London, will continue on what is often a fairly lengthy path of price reductions to encourage buyers to return in numbers."