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Asking Prices Same As Five Years Ago Say Rightmove

Property values at 2007 prices

Property values at 2007 prices!

The property portal Rightmove have reported that property asking prices on their website have dropped for the third month in a row.

The average asking price of a property new to the market in September is now £234,858 (GBP), down from the average value of £236,260 (GBP) in August, falling £1,402 (GBP).

  • New property instructions coming to market are on average £11,000 (GBP) cheaper than they were three months ago.
  • Despite the 0.6% monthly drop in property valuations, asking prices are still 0.7% ahead of last year.
  • Property asking prices are similar to those wanted five years ago.

In September 2007, the same month as the Northern Rock debacle started and the beginning of the UK financial crisis, UK property values averaged £235,176 (GBP).

Miles Shipside, housing market analyst at Rightmove, said: “This year’s extended summer holiday period has left new sellers’ asking prices almost the same as a year ago and, intriguingly, five years ago too.  In truth, the state of the housing market is little different now to this time last year, and prices have stagnated as neither buyers or sellers have been forced to change their behaviour in sufficient quantities to stimulate greater activity. However, back in 2007, few would have believed that house prices would still be the same in five years’ time. This would have been in the context of the previous five-year period to 2007 seeing an average rise of 55%. Equally hard to predict would be the extreme changes the housing market has undergone. While the average new seller’s asking price has remained virtually the same since September 2007, market conditions are much changed. They are patchy and localised and vary markedly for the many different buyer and seller segments.”

According to Mr Shipside the credit crunch winners included home owners in London, where prices have shot up 18.7% in the last five years to stand at £456,237, and cash-rich house buyers.

Credit crunch losers included people in the North, those trying to down-size to release equity for retirement, people with insufficient equity or in negative equity who were unable to fund their next move, and tenants forced to rent as they want to buy but are unable to realistically save for a deposit.

Rightmove asking prices are still far higher than Land Registry, Nationwide and Halifax property prices

  • Halifax is currently quoting the average property value for August as £160,256 (GBP)
  • Nationwide reckon the average property value for August is £164,729 (GBP)
  • Land Registry show the average property value at £162,900 (GBP) for July.

Homes built before 1919 have risen in value more than any other type of property over the past 25 years.

The report by the Halifax says pre-1919 homes are popular because there are fewer of them, and they tend to be in the best locations.

Over the past quarter of a century, the report reveals, homes falling into this category have risen in price by more than 450%.

This is equivalent to an average increase of more than £500 every month for 25 years, a price rise which has not been matched by any other type of property.

In 1986, pre-1919 homes had an average value of £33,619, making the category the cheapest of the four ‘ages’ of property.

By 2001, the average had increased to £117,990 and today it is £188,473, an increase of 461%, or £516 every month.

The other three ‘ages’ of property are 1919 to 1945, 1946 to 1960 and 1960 onwards.

Martin Ellis, housing economist at the Halifax, said it was easy to see why pre-1919 properties were now more expensive than any other. “The age of a property often determines its size, its style and location. Properties from the Victorian or Edwardian era tend to be in higher demand. This is because there are fewer of them. They are often larger, situated in desirable locations, and have a popular style”.

The cheapest properties are homes built between the end of the Second World War, which triggered a building boom, and 1960.

They cost an average of £144,988, and have risen in value by only 249% over the past 25 years.

As the study highlights the popularity of older properties, it raises concerns about the Government’s moves to encourage people to buy new-build homes.

The Prime Minister has said he wanted ‘everyone in this country’ to experience the ‘magic moment’ of getting the keys to their first flat. But the Government scheme, which allows people to buy with only a 5% deposit, is available only to those who want a newly-built home.

And it is this type of property which has plunged in value over recent years amid fears of further falls. Since the credit crunch began, the Halifax figures show, homes built after 1960 have dropped by nearly £40,000 in value.

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