Downward trend returns in June after five months of rises, says Rightmove
Asking prices for UK homes dipped in June for the first time in five months as rising mortgage rates squeezed first-time buyers out of the market, according to new figures out today.
Data from housing website Rightmove showed that the average price set by sellers fell by 0.4% between May and June to £226,346. But asking prices are still 6% higher than at the start of the year, fuelled by a shortage in available properties.
Rightmove blamed the decline on mortgage lenders, which it said were increasing their rates and continuing to demand large deposits from first-time buyers, forcing vendors to be more competitive.
Sellers in East Anglia were the worst hit, with an average drop in asking prices of 6.6%. Londoners fared better, with a cut of just 0.1%, while in Wales asking prices rose by 1.1% in June.
Rightmove said that sellers were having to vary prices to match local demand. For example, asking prices for detached properties have fallen by 5% over the past year, compared with a 7.4% drop for terraced houses.
Miles Shipside, commercial director at Rightmove, said: “It's a mistake to confuse the upturn in enquiries and sales with a return to a more normal market. While conditions are much improved on the darkest days of last year, we are now starting to see some big distortions and wild swings due to the combined effects of recession and restricted mortgage availability.
“As the best deals on property and mortgages are only open to the equity-rich, the new stock that agents are looking to attract has to match what these purchasers want to buy and can afford. Perennially popular areas with good schooling are in, while flats in large blocks and terraces requiring major works are out, meaning new sellers are having to adjust prices accordingly.”