Property website Rightmove says average asking prices have fallen 0.8% in July – the first monthly drop this year. This change in asking price is the latest sign that the housing market is finally cooling – at least a little.
Miles Shipside, director at Rightmove explains that the fall could be partially explained by a typical summer lull, however stricter mortgage rules and an expectation of an impending rise in interest rates may also be key factors.
“A price fall in July is not unexpected as prospective buyers turn their attention to the summer holidays, not to mention the added distraction of an engaging World Cup.
“Buyer confidence may also have taken a knock with suggestions that mortgages are becoming harder to get and repayments may get more costly sooner than originally anticipated, should the rumours of an interest rate rise before the next election come true.”
The fall in asking price was found across England and Wales including expensive areas such as Greater London and the south-east. The only areas to report a rise in asking prices were the north-west, East Anglia and the west Midlands.
These lower asking prices have pulled the annual rate of growth from 7.7% down to 6.5%. Despite July’s fall, Rightmove say that overall in 2014 prices will have gone up by 8%. Underpinning asking prices for the rest of the year will be a combination of lack of supply in popular areas, a strengthening market in northern cities and a proliferation of cash-rich third-time buyers.
Shipside says that market conditions still compare favourably with this time last year, as there has been growth in employment and the economy. He says the ‘year to move’ window looks set to be open for a while longer, although he does expect market activity to slow in the run up to the election in May.