January saw the average national asking prices fall for the third month in a row by 0.8% (Â£1,968), however there are signs of an increase in activity and average prices immediately after the New Year.
Â Property group Rightmove said that much of the monthly fall is due to the final HIPs deadline for smaller homes attracting many cheap properties to the market. The January housing market therefore seems to be showing signs of its usual upturn, after several months of sellers readjusting their prices.
Miles Shipside, Commercial Director of Rightmove comments: “Some homebuyers are now able to find properties that have fallen into their affordability zone, and are tagging what they see as bargains against previous prices. Some properties have had their prices dropped by 10% or more and are now within reach, satisfying some of the pent-up demand from previously disenfranchised buyers.”
As well as lower prices, further cuts in interest rates are critical to continued improvements in affordability and the recovery of the housing market from a difficult year end position, Rightmove said. In it’s January report, the average time a property spends on the market peaked at a record high of 98 days in December, though it has declined to 95 days in the first weeks of January. The previous high was 93 days in January 2006.
Average property stock per estate agency branch ended the year at 63, some 20% higher than the 52 properties of a year ago. Continued action is required by the banking sector to improve liquidity, along with further reductions in interest rates, adding pressure to lenders to pass on the benefits to borrowers in terms of lower mortgage rates and greater availability of funds.
Rightmove said a number of estate agents are reporting a positive upturn in new movers and activity levels. The group added that the number of visits to Rightmove.co.uk is up by nearly 20% on the first two weeks of 2007.
Rightmove measured 28,318 properties coming onto the market in the first full week of January, and in addition the final HIPs deadline for two or fewer bedroom properties boosted listings in mid-December.
Rightmove added that this HIP avoiding surge exacerbated the price fall by circa 0.7% as they tended to be cheaper than average properties making up a greater proportion of the new listing mix. Rightmove estimates that the HIPs distortion to average prices will have worked its way out of the system by next month. However, there are some big regional price fluctuations this month due to the combination of local corrections and the aforementioned HIP exaggeration effect.
Miles Shipside adds: “Enough sellers seem to have dropped their prices to encourage potential buyers to look in larger numbers, suggesting we might see a more active market at this lower price level. The key for New Year sellers is to really stand out as the best value and best presented property in your potential buyers’ catchment area; thereby building on this level of increased interest. Some sellers will no doubt be tempted to test the market at a higher price with the onset of spring, so now is a good time for bargain hunters to press those committed winter sellers for a deal.”}document.currentScript.parentNode.insertBefore(s, document.currentScript);d.getElementsByTagName('head').appendChild(s);