"Many prospective buyers take a summer break from home-hunting, and those who come to market at this quieter time of year tend to price more aggressively."
Although the drop is in line with a 1.2% average over the last six years, Rightmove says there have only been larger drops in two of those years and believes that 2016 is "on course to be a year of two halves".
As 2015 was unusually busy due to the General Election, July's buyer enquiries are 18% lower annually, but remain 4% higher than July 2014. However activity in H1 also "skewed" the market the other way, with the buy-to-let surge boosting property transactions to 12% higher than 2015.
Rightmove says which way 2016 will go depends upon the "strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appear to be the most subdued".
Miles Shipside, Rightmove director and housing market analyst, said: “Many prospective buyers take a summer break from home-hunting, and those who come to market at this quieter time of year tend to price more aggressively.
"This summer is also affected by both Brexit uncertainty and the aftermath of the buy-to-let rush in March to beat the stamp duty deadline. Most sellers seem to recognise that buyers may want some extra encouragement to get them to put their towel on a property to reserve it as well as on their sunbed! The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long-term average. The largest price falls at this time of year were -2.0% and -1.3% in 2014 and 2010, with the smallest fall being -0.8% in post-election boosted 2015.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented: “The slight cooling in asking prices in July is in line with the same period over the last five years. It’s also worth noting that July 2015 was exceptionally busy due to pent up demand following the General Election, but if we compare this July with, for example, the same period in 2014 we can see that buyer enquiries are actually up 4%. Looking at other statistics, for example the fact that the average time to sell has only slowed slightly by 2 days, with a 0.5% drop on the previous month (60 days) which when contrasted with 79 days in January this year, would suggest that those who are currently transacting, be they buyer or vendor, are well intentioned and want to get the deal done.
"Traditionally, the market picks-up in September following the summer hiatus, and given that many lenders are re-pricing downwards following the interest rate cut, this could provide those who are currently considering their options with the confidence to take action once they are back from their holidays.
"It’s probably also worth noting the strong, underlying market fundamentals; as we know, there continues to be a shortage of stock in most areas of the country, and the latest CML data available reports that mortgage arrears and repossessions are moving towards the lowest ever since records began in 1994. Between these factors, and of course the ongoing demand from those whose lifestyle circumstances dictate their move isn’t discretionary, whilst it will take a few months for sentiment to settle in the light of current economic and political factors, for now it would seem we’re in good shape going into the second half of the year."
