December sees record asking price drop

The December House Price Index from Rightmove has shown the largest ever monthly fall in price of property coming to market, down by nearly £9,000.

Related topics:  Finance News
Rozi Jones
15th December 2014
housing market house down decline drop decrease

Asking prices in England and Wales fell £8,703, from £267,127 to £258,424 between November and December. This drop has reduced the annual rate of increase from +8.5% in November to give a final 2014 figure of +7.0%.

However, despite the slowing pace of growth, the research showed all regions recording positive price growth for the year compared to December 2013.

Miles Shipside, Rightmove director and housing market analyst, comments:

“Whilst a near £9,000 drop is the biggest ever reduction in the price of newly marketed property compared to the month before and a sign of a market continuing to cool, a fall is not unexpected in December. Though sellers are fewer in number at this time of year, those that do come to market are often keener to sell so price lower in a bid to stand out. The overall picture for the year is still one of a much recovered property market, with sellers and their estate agents confident enough to be putting property on the market at a higher price on average than a year ago, although we predict a slower pace of price growth in 2015. This means that sellers and agents will have to work harder to achieve a sale next year.”

Going into 2015, Rightmove predict an average rise in asking prices of around 4% to 5%.

The index expects East and South West regions to perform best, with London prices waning as affordability is stretched and Stamp Duty changes come into force.

Rightmove also predict better buying opportunities at the start of 2015, with price rises still likely to outstrip wage inflation. In addition, April’s pension reforms may encourage more buy-to-let investors, helping first-time buyers.

Early buyers could also benefit from properties priced below the former Stamp Duty thresholds, before sellers of property worth just over the thresholds price their property at its true value, adding to purchase costs and house price inflation in 2015.

Branch Manager at Keppie Massie Residential in Liverpool, Debra Beach, says:

“As the London market cools somewhat the North West in general is seeing interest from investors from the South and overseas. However many of the suburbs are struggling to keep up with this pace, with the under 100k price bracket outside the city centre in particular experiencing an imbalance in supply and demand; moreover this bracket will see no benefit from the stamp duty changes so this recent positive step will not affect properties at this level. Prices have fallen during recent months as sellers have been competing to attract fewer buyers than earlier in the year; this combined with stricter mortgage application procedures has meant that the hope of a mini-boom have been short lived. We are cautiously optimistic that the New Year will see renewed confidence, with more stock coming to market and more buyers looking to secure purchases and mortgage deals before both prices and interest rates rise.”

Shipside concludes:

“Buyers are having a tougher time but remain price-positive as only one in ten in our latest survey think prices might fall over 2015.

"While the Bank of England’s measures are making it harder to buy, the Chancellor has boosted buyers’ coffers with a welcome and long-overdue overhaul of Stamp Duty that will help most in the mass-market. Market volumes are likely to be more muted in the first half of 2015 than in 2014, but conversely we could see a better second half."

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