RICS: house prices fall, but energy-efficient homes come out on top

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on latest RICS residential market survey for December, showing house prices fall, but energy-efficient homes come out on top.

Key points from publication:

• • House prices fell for the third consecutive month. Buyer demand, the number of sellers and property sales were also down.
  • More respondents said prices had fallen than a month earlier – as the trend took hold.
  • They expected prices to keep falling over the following few months.
  • 61% said highly energy efficient homes were holding their value.

Sarah Coles said:

“The house isn’t winning any more, with prices down for the third consecutive month.

“The trend is gathering pace, as more agents say prices are falling with each passing month, and every region is seeing price drops.

“The picture looks particularly bleak in East Anglia and the South East, where prices are dropping most sharply. 

“Falling house prices have a nasty habit of bedding in, because buyers feel they can save money by waiting a bit longer. This depresses demand, and pushes prices down, so more buyers decide to wait-and-see. It means this may just be the start of it.

“There is one spark of hope. Fixed mortgage rates are on their way down, which could be enough to persuade some buyers back into the market. However, the pressure from higher prices is likely to keep huge numbers of them away.

“Inflation may be past the peak, but it’s inching downwards at a glacial pace, so prices will continue to rise at quite a lick.

“With the Energy Price Guarantee going up by another £500 in April – and the government’s universal lump sums halting at the same time – prospective buyers  are going to find their finances stretched even further.

“The fact that energy bills are such a worry right now has brought a boon for sellers with particularly energy-efficient homes. 61% of the agents said that these were holding their value in the current market, and 41% of them said these sellers were chancing their arm, and bumping up the asking price.

“If you’re put off by the falling market, and choose to rent for longer, the market will deal you another blow – because rents are still rising. December saw yet another month of disappearing landlords – as they sell up and get out of the market.

“Meanwhile, although the growth in tenant numbers has started to slow, it’s still up for yet another month, and agents expect rents to keep climbing.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay