The latest House Price Index for the UK, by Rightmove, showed that home sellers cut down their asking prices with the house price index dropping by 2.4% amidst concerns of recession and the Olympic Games.
The Rightmove House Price Index, was expected to come out at -1.7% but actual figures came out much lower. The drop of 2.4% is being seen as the biggest decline in close to 10 years. The survey by Rightmove, which measures property searches across the nation showed that the average asking rate for homes was at £236,260 a drop of approximately 50%.
August is usually a slow season with most families off on vacation. The effect of this was clearly amplified with the double dip recession and Britain’s performance at the Olympic games which seem to have distracted home owners.
The report hints at the fact that sellers will have to compete very hard in order to attract home buyers during autumn. The housing markets in the UK has seen housing prices drop of stagnate across the nation with the exception of the city of London where prices saw marginal declines of 1.2% against July but the prices seem to be still about 8.8% higher compared to last year. The North West was the sole performing region where home prices were unchanged at £163,002. In contrast the South East saw the biggest change with asking prices dropping to £302,628, a 4.2% decline month on month.
Rightmove’s survey which covered England and Wales noted that there was no substantial increase in the asking prices in other parts of the region, the first since November last year. Prices in Wales saw declines 2.6% month on month with asking prices reaching £162,736. Comparing the same figures for the region, the asking prices for houses in Wales was at £171,744 around the same time last year.
The current drop in prices indicates an annual declines in the rage of 5.2%, which is considered to be quite a big slump anywhere in the UK. West Midlands saw the second largest drop in prices at 1.9%.
Miles Shipside, director of Rightmove commented on the statistics that the number of new home sellers was moderately higher compared during the same periods for last year reflecting the urgency for home sellers to compensate the distractions of the Olympic Games. Prices were dropped quite aggressively compared to previous summers. With approximately 127,992 new properties that came up for sale during the month of August, which was higher by 0.4% since August 2011, the UK housing market is seeing a saturation of sellers.
The GBP was seen trading sideways against the US in the region of 1.5700. The week ahead seems a bit slow with not much of market moving events being lined up, with the exception of the UK Q2 GDP figures being released. Markets expect to see a -0.5% QoQ in the UK’s GDP.
Click here to access the original House Price Index report for August 2012 from Rightmove.