ASKING prices fell in the first week of June in five out of ten regions of England and Wales in a further sign that the property boom is easing.
The average asking price recorded by the Rightmove website fell £683 or 0.4 per cent in the week that interest rates rose for the second month in a row. That follows a rise of 15 per cent or nearly £26,000 in the first five months of this year.
Falls were recorded for the third week running in London, where the average asking price has dropped £8,300 since the middle of May, confirming that the market is cooling from the top down. In the South East the average home was £1,777 cheaper in the week before the Governor of the Bank of England issued his property market warning. Though London recorded the sharpest fall, terraced houses fell in value more than other property types. According to Rightmove, which lists 45 per cent of all homes for sale, the average terraced house was down £1,200 or 0.8 per cent in the first week of this month, having risen 19.8 per cent in the last year.
This figure helps explain the falls in Wales, the North West and West Midlands, which have been at the forefront of the property boom. Prices of the cheapest homes have been driving the huge monthly house price rises recorded by the Halifax and Nationwide, as first-time buyers and investors spread into areas where property is most affordable. Following reports last week of falling sales in areas like Hull and Stoke, this may be further evidence that the buy-to-let bandwagon is slowing down.
Asking prices in Hull have risen nearly 37 per cent in the past 12 months, taking the average house price from £62,000 to nearly £85,000.
Advertisement
In Blackburn prices are up 21 per cent year on year and rose 7 per cent in May alone, according to Rightmove. Local estate agents said this year’s rises were due to “a dramatic increase in the number of investors from out of the area”. Asking prices continued to rise during the first four weeks of Rightmove’s latest survey, up 2.6 per cent on the previous month, before falling away during the final week. The figures are not seasonally adjusted, nor was the fall very large, but Miles Shipside, Rightmove’s commercial director, said it could be a significant sign of what’s to come.
“The impact of four interest rate rises is beginning to bite,” he said. “Right up till the end of May the boom continued unabated but, come June, the market seems to have turned.” Rightmove’s findings confirm anecdotal reports from estate agents that buyers are refusing to pay sellers’ over-inflated asking prices. Reports from the Royal Institution of Chartered Surveyors, the National Association of Estate Agents and the Hometrack property database all suggest the peak of the boom has past.
All eyes will now be on the figures from the Nationwide and Halifax, due at the end of the month.