According to Rightmove the asking prices for properties that have entered the market recently have fallen for the second consecutive month. Things normally slow down a little over the Christmas and New Year period but asking prices have fallen more than they usually do.
Biggest Asking Price drop since 2012
In the past month asking prices have fallen by 1.5%. This equates to an average fall of £4,496 for the new homes entering the market in December 2018. There was a drop in November as well and this means that asking prices are 3.2% lower than they were in October 2018. On average that is a drop of £9,719 per home.
This is the worst fall in asking prices over two consecutive months since the year 2012. In that year during the same period asking prices reduced on average by £11,836.
Buyers are now more Tempted
It is not all bad news. The Christmas and New Year periods usually are peak times for property viewings and Rightmove believes that the lower asking prices are persuading more buyers to get back in the market. Property sales have been very resilient in recent weeks which would support this.
There is nothing new about the lowering of asking prices over the Festive Season to attract buyers. So seeing a fall in asking prices over November and December is pretty normal. But the falls are larger than they usually are during the period.
People are making their finances stretch more these days which can prevent them from buying for the first time or trading up. These lower asking prices may be enough to let some people back in. Increased wage growth will help to sell more properties as well. If you are selling your property and have to drop the asking price then expect a reduction on the home you want to buy too.
Brexit Uncertainty will Force Asking Prices down
On top of potential buyers having less money to play with there is the uncertainty surrounding Brexit that will have a negative effect on asking prices. The regions where house prices rose the highest since 2012 are experiencing price drops every year.
The biggest drop is in London at 1.1% followed by the South East with a 0.9% drop and a 0.7% drop for the East of England. Elsewhere in the UK there have been increases in house prices especially in the North. But London and the surrounding areas have dragged down the overall house price increase for the country to around 0.7%.
Annual Price Growth best in Wales
The best annual growth in house prices in the UK was in Wales at 6.2%. Other regions that saw a growth between 4% and 5% were the West Midlands, the East Midlands and Yorkshire and the Humber.
Rightmove believe that in 2019 the North will again outperform the South with house prices. The company predicted that in 2018 UK house prices would rise by around 1%. This low prediction rate was due to sluggish wage growth and the tightening up of criteria for lending.