Parts of Britain appear to be turning into a property buyer’s paradise, with asking prices across the country falling by an average of £3,360 in one month.
In August, the average price tag of a home was £313,663, compared to £310,003 this month, Rightmove’s latest house price index reveals.
Those at the top of the housing ladder are benefiting the most from the price drops, with average asking prices for homes in expensive areas like Kensington and Chelsea in London falling 14.3 per cent or £308,179 in one month to an average of £1,845,692.
Up and down: Regional property price trends from the Rightmove House Price Index
Across London, property asking prices fell 2.9 per cent in the last month, with buyers unable or unwilling to fork out the often exorbitant asking prices.
The capital is the only region to have seen an annual fall in asking prices and taking London out of the equation, asking prices would have only fallen by 0.5 per cent, the property search website says.
The South East, South West and Wales, West Midlands, North West and East of England did all see asking prices fall this month – but are still up on a year ago.
In the last month, the asking price of a home in Wales has fallen by an average of 3.3 per cent to £181,231.
In the North West, asking prices have fallen from an average of £188,592 to around £186,238 in a month.
Even in the commuter haven of the South East, property prices have fallen by 0.4 per cent in a month to an average of £415,786.
Miles Shipside, a director at Rightmove, said: ‘As we enter the Autumn selling season it is usual to see estate agents advising new-to-the-market sellers to push up their asking prices.
‘But this year all four southern regions have seen new sellers on average asking less than those of a month ago, reducing the national rate of increase.
‘There were Autumn price bounces nationally in 2014, 2015 and 2016, but the south of the country has turned this month into a bit of a damp squib, whilst some northern regions are still showing marginal signs of upwards price pressure.
‘Estate agents are clearly advising many sellers that they have to lower their price expectations to fit in with buyers’ stretched financial resources, with that price compromise hopefully generating extra buyer interest.’
Slow market: Across London, property prices fell by 2.9 per cent in the last month
While London, the South East, South West and Wales and other regions saw property prices fall in the last month, the North East, East Midlands and Yorkshire and the Humber all saw prices rise.
The North East saw the biggest monthly rise, with the cost of a home up 0.5 per cent to an average of £149,550.
On an annual basis, Yorkshire and the Humber has seen the biggest increase in prices, with the cost of a home up 5.5 per cent to an average of £175,356.
With the price of property coming to market having increased every year for the last six years, most buyers have seen their buying power eroding away.
But annual average wage growth is now outstripping the annual rate of price increase in newly-marketed property.
The Office for National Statistics has reported average annual wage increases running at 2.1 per cent for both the second quarter of this year and the month of July, while the price of property coming to market is now growing at just 1.1 per cent.
This is the lowest annual rate of house price increase since February 2012 when it stood at 0.7 per cent.
Regional variations: The North East saw the biggest monthly rise, with the cost of a home up 0.5 per cent to an average of £149,550
‘Under-supply’ in the UK remains a problem across the housing market, Rightmove added.
Mr Shipside said: ‘The housing needs of growing families are harder to postpone than other more discretionary moves, and this has resulted in average asking prices for typical second-stepper type homes increasing at over twice the overall national average rate.
‘With competition among lenders to lend, increasing wages and the lowest level of unemployment since 1975, buyers are still keen to buy if the property is worth the money and well presented.
‘If more sellers appreciate that sensible pricing is the best way forward, then this will help to maintain good levels of buyer activity despite the uncertain political outlook.’
Mortgage rates could soon be on the up as the Bank of England continues to drop hints that interest rates could be raised in the next few months.
From March 2009 to August last year, interest rates were kept at 0.5 per cent, before being dropped to 0.25 per cent in 2016.
With inflation now at 2.9 per cent, the Bank is under increasing pressure to hike interest rates.
The Rightmove index is compiled from the asking prices of properties coming onto the market via over 13,000 estate agency branches listings.
According to data published by the Office for National Statistics this month which looks at prices homes are actually sold for, house prices have grown by 5.1 per cent in the last year, with the average cost of a property at £226,000.
LONDON ESTATE AGENT VIEW
Roger Collings, branch manager at RE/MAX in Prime Central London, said: Between 2009 and 2015, the large majority of property buyers were cash buyers, although currently not so much.
In the current market sales volumes have dropped in Prime Central London, and the market has softened to some degree.
We are finding that most homeowners are not in any hurry to get rid of their properties, which has resulted in fewer listings available to buyers and fewer sales.
In 2009 until 2015 the Central London market was inundated with investors looking to purchase property as a way to invest their money in a safe financial environment.
However, since the introduction of the three per cent surcharge on stamp duty paid by investors, along with the uncertainty as to how Brexit will impact London’s property market, investors have been standing on the side-lines.
We are beginning to see more and more investors venturing back into the market, but we are still a long way from the volumes we saw pre-referendum.
There are markets outside of Central London that are still buoyant with local buyers.