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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.

Online property portal, Rightmove states that it has recorded a drop in the average asking price for residential property this month, the first significant fall since January 2012.

Average UK residential property prices have fallen by 1.7%, a drop of around £4,138 (GBP),

The demand for residential property has been low due to a number of factors:

  • Euro 2012
  • The weather, deterring potential buyers from viewing properties,
  • The Olympics, for distracting people’s focus away from moving.

Righmove said that there were twice as many people trying to sell a property than those trying to buy one, with each branch of the agency having an average of 75 residential properties that they were unable to sell.

The company warned property vendors that further asking price cuts could be necessary to secure a sale.

Director of Rightmove Miles Shipside, said: “The fact that we have not seen major price falls in the UK and that many areas are not awash with ‘For Sale’ boards may lead some sellers to be over-optimistic with their pricing. New seller numbers may be down some 30% on the period prior to credit-crunch, but the numbers achieving a successful sale are down by half and average unsold stock levels are creeping up.”

The West Midlands was the only region in England and Wales where prices increased in July compared with the previous month – with asking prices up 2% to £191,121.

In contrast, residential property prices dropped most in London, compared with the previous month, with a fall of 3.6% to £460,304.

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