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House prices down despite 'January spring bounce'
House prices fell 0.8% in January, but increasing buyer interest and a new shortage of sellers is likely to underpin prices in the months ahead.
House prices fell 0.8% in January, and are down 0.4% compared to this time last year, according to new figures.
The average asking price in the UK is now £224,060 – down from £225,766 in December.
This monthly fall, however, masks a 1.4% rise in asking prices seen in the first week of January, which is an early indicator that a new shortage of sellers is likely to underpin prices this year, said property website Rightmove.
Activity among potential buyers soared in January. Rightmove recorded a record high 44 million property searches on its website during the first 10 days of 2011 – a 27% increase on the same period in 2011.
The willingness or ability of new sellers to come to the market however remains weak. Estate agents are marketing less than one new property a week per branch – the lowest ever seen, Rightmove said.
What’s more, as well as less property coming to market there is less available stock already on the market compared to the same period last year.
‘Average unsold stock per estate agency branch is 66, the lowest we have measured since February 2010. The 36,433 properties coming to market this month equate to an average of less than one new listing per branch per week. This is the lowest recorded in the ten years of Rightmove’s House Price Index and around half of pre-credit crunch levels,’ said Miles Shipside, director of Rightmove.
‘Agents report prospective sellers are being deterred by a combination of a shortage of confidence, lack of choice of property to buy and restrictive mortgage lending,’ he added.
Looking forward Shipside said future price changes depend on where in the UK you live.
‘The lack of property coming to market in some areas will help to underpin new sellers’ asking prices in those locations, especially as estate agents compete to attract fresh stock for the new year. January often sees the beginning of a ‘spring bounce’ in the asking prices of properties coming to market, and there is again evidence of this with an increase of 1.4% in the first week of 2012.’ he said.
London, for example, continues to buck the downward trend in prices, starting 2012 with a 0.8% increase in asking prices as housing demand continues to outstrip supply.
Overall, like almost all property predictions right now, Rightmove forecasts that the market will remain ‘challenging and fragmented during 2012’.
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