Homeowners are finally coming to terms with the housing market slump, as the average asking price falls 1.2% in June.
According to property website Rightmove, the average asking price for homes in the UK and Wales in June is £239,564 – nearly £3,000 less than in May.
Up until now, sellers had been ignoring the difficult plight of buyers and demanding ever-larger sums for their property. That situation was unsustainable and the fact asking prices are now falling seems to indicate that buyers have accepted the fact that their house is no longer worth what it once was.
The fact that the dip in asking price has come in June – traditionally one of the peak months for selling a home – adds further weight to this claim.
Home value “down 10% on peak”
"In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices,” explains Rightmove commercial director Miles Shipside.
“It was a mad state of affairs that defied the laws of economics. Thankfully, new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers.
"For most sellers that will mean whatever they thought of asking for their property at the peak of the boom, they need to take at least 10% off. Otherwise their property will stagnate.”
Asking price falling in the capital
According to figures from Rightmove, there was significant regional variation regarding asking prices.
Prices were falling fastest in the south of England, with the South-east dropping by 2.4% and London by 1.4%.
Conversely, asking prices increased by 0.5% in the North and 0.4% in the West Midlands.
Buyers disappearing fast
Another key development in the property market has been the dramatic decline in potential buyers. One year ago there were seven homes for sale for every buyer, but this ratio has more than doubled to fifteen to one.
The reason behind dwindling buyer demand is a combination of stricter lending rules and the sky-rocketing cost of living. Also, many first time buyers (FTBs), long priced out of the market due to the property boom, are adopting a wait and see approach to buying.
According to the Council of Mortgage Lenders, the number of new loans granted to FTBs fell by 36% in April.
