The seasonal drop in new seller asking prices was less than usual in August, according to new figures. Rightmove's latest index showed asking prices for property in the UK were down 1.8 per cent but this is less pronounced than in previous years as the wider market recovers. However, this is still the first price drop to be noted in 2013.
Yet August did see a new record asking price for flats and apartments, with buyer demand set to rise further as Help to Buy starts helping those purchasing second hand property in January. Overall, the first eight months of the year saw property coming to the market with average price growth of 8.8 per cent. This has led to a median increase of GBP 20,210 in house prices.
However, these levels aren't sustainable if balance isn't brought to the market, according to Rightmove. The broader economic recovery, low interest rates and the Help to Buy scheme need to be balanced against a greater number of properties coming onto the market from sellers, increased construction of new homes and more residential conversions. Currently, demand is far outstripping supply and as lending improves, it will be difficult to keep a cap on prices. Rightmove claims marketing the Help to Buy scheme clearly to potential sellers as well as buyers will go some way to creating a balance as the scheme progresses.
Nonetheless, it is clear the market is continuing to strengthen and demand from homemovers is certainly returning, despite the August dip in prices. Miles Shipside, Rightmove director and housing market analyst, said: "A holiday season price dip is the norm in August, with an average drop in the last five years of over two per cent. Even with this month’s below par 1.8 per cent fall, the national average asking price is still up by more than GBP 20,000 so far in 2013."
"Demand is already on the up, and that’s before the roll out of phase two of the Help to Buy stimulus," he continued. "It is now critical that the supply of property improves so that the goal of a significant increase in transaction numbers is not over shadowed by an unsustainable boom in property prices."
- Tuesday 03 September 2013