Lower Prices Tempting Buyers Back to Market
BUYERS are returning to the property market as house prices fell for the
third month in a row.
The year-long sales recession is coming to an end as more realistic pricing on the
part of sellers is tempting potential buyers back to the market, according to property
website Rightmove.
At the same time the decision by the Bank of England's Monetary Policy Committee
to cut interest rates by 0.25 per cent to 4.5 per cent in July has helped
boost people's confidence.
The group said house prices dropped by 0.4 per cent during the five weeks to
September 10, contributing to a £3,200 drop in the average cost of a home in
England and Wales during the past three months to £195,407.
Down
Annual house price growth also slipped further during the five weeks to just
1.6 per cent, down from 2.1 per cent the previous month.
But with annual wage inflation currently running well above this at 4.2 per cent,
affordability has improved for the fourth month in a row.
Rightmove said the traditionally quiet period during August failed to materialise
this year, with estate agents reporting that sales levels during the month had
outstripped those seen during both June and July.
Miles Shipside, commercial director of Rightmove, said: "The market has
been searching for a level of sustainable pricing at which sales volumes will
begin to increase.
"There are now clear signs that some buyers see this as the time to re-enter
the market. We may look back with hindsight and say that the summer of 2005 was
the time to buy at the bottom of this cycle in the housing market."
Average
The group said that while the number of properties coming on to the market
remained high, the average number of homes each estate agent had on their books
was unchanged at an average of 72.
It said this ran counter to the trend usually seen during August when stocks
of unsold property rose while buyers went on holiday, although it added that
there was still an over-supply of property on the market.
At the same time the number of days it takes to sell a home has reached a plateau
of 78 days, and there are reports of properties that have just been put on the
market selling quickly.
Mr Shipside said: "Sellers are finally being more realistic with their
asking prices, which, combined with cheaper mortgages and rising wages, means
that more buyers can now afford to enter the market."
