UK market sees first monthly fall in asking prices this year

Asking prices in the UK fell by 0.2% in the 12 months to July 2019 and also by 0.2% month on month, the first monthly fall so far in 2019, the latest index shows, taking the average to £308,692.

The price of newly-listed property in the four-bedroom-plus market fell by 1.1% month on month, according to the figures from property portal Rightmove, while lower and middle sector properties are holding their price better.

The firm says that the figures indicate that it is likely to be a buyers’ market in the second half of 2019. Less property is coming to market, but it is taking longer to secure a buyer, so estate agents’ average stock per branch is at its highest since July 2015.

Year on year prices fell in Greater London by 1.7% and month on month by 0.2% to £617,941, in the South East they fell 0.5% on an annual basis and were unchanged month on month at £409,905, while in the South West they were up on an annual and month basis by 0.7% and 0.3% respectively to £312,176.

In the East of England asking prices fell by 0.6% year on year and were unchanged month on month at £354,104, in the East Midlands they were up on an annual basis by 0.5% but fell month on month by 1.3% to £227,551 and in the West Midlands the annual increase was 1.2% but on a monthly basis there was a fall of 0.3% to £230,435.

In Wales prices were up 2.2% year on year but down 0.7% month on month to an average of £200,697 while in Scotland prices were down 0.2% year on year but showed the stronger monthly climb with prices up by 1.3% to £157,941.

Elsewhere, prices were up on an annual basis but down month on month. In Yorkshire and the Humber they were up 1.3% year on year but down 0.3% month on month to £194.045, in the North East they climbed 1.4% annually but were down 0.4% month on month to £153,176 while in the North West prices rose on an annual basis by 2.5% but were down 0.2% on a monthly basis to £200,338.

The data also shows that the time it takes to secure a buyer is at the longest at this time of year for six years while overall market fundamentals remain sound apart from confidence, and buoyant mortgage approvals indicate more resilient activity in the lower and middle sectors. It is buyers at the upper end, who are less likely to need a mortgage, who appear most hesitant to engage.

Miles Shipside, Rightmove director and housing market analyst, said:

‘With continuing political uncertainty, we expect buyers in market sectors where there is an oversupply to have a stronger hand negotiating lower prices in the coming months. With sound underlying market fundamentals, apart from the lack of confidence caused by the uncertain political outlook, there should be a better bargaining opportunity for those who have hesitated and missed the busier spring market if they can now find the confidence to engage without waiting for more certainty.

‘The housing market fundamentals remain largely sound in many parts of the country, but the current political climate means that the crucial ingredient of confidence has been impaired, and that is causing some potential buyers and sellers to hesitate. With record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty.

‘Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the last four years, so there should be more choice of properties to buy. It could be a good opportunity to negotiate a relative bargain in the second half of the year, if they can set aside the continuing Brexit distractions.’

A breakdown of the figures shows that newly market homes fell by 7.8% in July year on year and sales are being agreed are down by 4.6% in the year to date compared to the same period last year.

Estate agents’ total average stock per branch is higher than at any time in the last four years. Average stock is now running at 53.3 properties, the highest number since the 54 that was recorded in July 2015. In addition, the average time to secure a buyer is at 62 days, the highest at this time of year since 2013. This longer time to secure a buyer, coupled with higher property stocks, suggest that it will be more of a buyers’ market in the second half of 2019.

Shipside explained:

‘Growing numbers of properties on agents’ books even though fewer properties are coming up for sale are evidence of a more challenging market, with more sellers competing to get their transaction over the line. With activity and prices often weaker in the second half of the year, it will be those sellers who are bold enough to price aggressively who will attract buyers with the confidence to act rather than hesitate. It would appear to be sellers in the upper end of the market who need to be boldest on pricing, as data shows that the middle and lower sectors are holding up better.’

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