London property sales see summer slump

John Hewitt Jones

August 15, 2016

The average asking price for London properties fell by 1.2% this month, latest date from the Rightmove house price index reveals.

Up to 90% of properties advertised in the last four weeks were put on the market at an average of £3,602 lower than the previous month.

While the seasonal slowdown is usual for this time of year, the April change on second home stamp duty and Brexit uncertainty may also have had an effect on the rate decrease.

Miles Shipside, Rightmove director and housing market analyst, said: “Many prospective buyers take a summer break from home-hunting, and those who come to market at this quieter time of year tend to price more aggressively.

“This summer is also affected by both Brexit uncertainty and the aftermath of the buy-to-let rush in March to beat the stamp duty deadline. Most sellers seem to recognise that buyers may want some extra encouragement to get them to put their towel on a property to reserve it as well as on their sunbed.

“The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long-term average. The largest price falls at this time of year were -2.0% and -1.3% in 2014 and 2010, with the smallest fall being -0.8% in post-election boosted 2015.”

Jeremy Duncombe, director, Legal & General Mortgage Club, said: “July has been an interesting and unpredictable month following the UK’s decision to leave the European Union.

“The reality is however that not much has really changed, and the underlying housing market continues to remain strong due to a combination of low rates, high demand and lack of supply.

“Apart from small pockets of the country, house prices are still rising – even if slower than before.”

“The housing market clearly needs to change, as house prices are relentlessly outstripping wage inflation. It is high time that we put in place a revolutionary housebuilding programme that will help to bring increases in house prices back in line with that of wage inflation.

“It is up to our new Government and housing minister to start putting plans in place to build the 300,000 new homes each year that we have been promised.”

Robert Scott-Lee, managing director of Chancellors estate agent in Surrey, pointed towards a pick-up in market momentum in September.

“As we look towards the Autumn market we feel very confident with the underlying fundamentals. Applicant enquiries are strong and buyer motivation is strong given lending rates and general demand caused by under supply,” he said. “However we of course note that political developments may cause ongoing disturbance to the normal negotiation process.

“Undoubtedly some have looked to take advantage of the uncertainty by renegotiating offers. There are sellers who have crumbled but equally there are sellers who have stood firm, and with the benefit of back up buyers have been rewarded by their insistence on maintaining the sale at the agreed price.”

According to the analysis published by Rightmove, larger homes with four bedrooms or more will benefit most from an autumn pick-up in sales. Currently, this type of home takes an average of 74 days to sell.

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