Rightmove House Price Index saw a second month of drop in August, one of the biggest ever declines with home buyers stay away from property search overshadowed by the Olympic events.
The seller’s market saw prices being reduced by an average of 2.4% from the previous month in August. The asking price in the property market saw average prices of £234,858 which has been more or less remained the same since the past five years. The current property prices have been stagnant since 2007 and the periods before saw a boom in the property markets at highs of over 55%.
Incidentally, July saw a 1.7% drop as well. However, the Olympic games did not deter home sellers to put up the property in the market with the number of properties showing modest increase to 0.4% annualized. Rightmove’s report shows a growing difference between property prices in the North and Southern regions.
In the region of London, home prices dropped 1.2% month on month in August but was 8.8% higher in comparison to last year. The region of Wales saw home prices drop 2.6% month on month.
The drop in the home prices is considered to be seasonal as sellers tend to put up their properties for sale, at a competitively lower price, according to the report. The decline in August was substantial in comparison to the average rate of 1.1% decline that was measured in August over the past 10 years.
The squeeze in the credit markets has made a dent in buyers trying to gain access to mortgage financing, which on account of becoming more difficult has been hampering the buyer’s from financing their dreams of buying a house. As the credit crunch tightens, lenders now require higher deposits which is making it almost impossible for home buyers. The average loan to value is currently at 25%.
Last week, RICS in its survey showed that the house prices were on the decline in August, the same which was corroborated by Halifax house price survey as well, which showed a 0.4% month on month decline in August while July saw 0.7% declines.
Rightmove PLC is the UK’s largest property website having over 90% of all UK real estate agents registered with Rightmove, making it ideal to provide insights into the country’s housing market, prices and more. Rightmove is also ranked as the top 20 most popular websites in the UK. To view the original report by Rightmove, for August House Price Index, click here.