The housing market continues to show signs of a slowdown as asking prices dropped 2.3 per cent over the past month, according to new figures.
The average listed home fell £7,218 between July and August to £301,973, dragged down by sharp declines in London, according to Rightmove.
The property portal, which has 90 per cent of all estate agent listings on its website, played down the price fall saying it was ‘seasonal’, although it is steeper than the 0.9 per cent fall recorded this time last year.
Seasonal fall? Asking prices fell by more than £7k over the last month, Rightmove data shows
Last year’s decline was originally stated to be 0.9 per cent, but Rightmove says it has revised its methodology since and now includes data from Scotland. With the revision, last year’s decline would be 2.1 per cent.
Despite the monthly fall, asking prices are still higher than last year, having risen 1.1 per cent.
Miles Shipside, Rightmove director said sellers need to make more ‘substantial’ discounts to entice buyers as affordability remains stretched.
He added: ‘With lacklustre average wage growth, more buyers are bumping up against the tighter lending criteria brought in four years ago following the Mortgage Market Review, which were intended to prevent another boom-and-bust cycle.’
The major drag on the national average asking price came from ‘the more subdued’ market in London and south east commuter-belt.
The major drag on the national average price came from the ‘more subdued’ market in London and south east
Rightmove said if those two regions were excluded then the rest of the country would have a smaller monthly drop of 1.5 per cent.
Asking prices in the capital fell 1.2 per cent compared to July and by 3.1 per cent compared to August last year to an average £609,205.
It comes as official figures released last week showed London prices falling by 0.7 per cent in the year to June – their fastest rate since 2009, when the country was reeling from the global financial meltdown.
David Plumtree of Connells Group estate agency said that, since the start of the summer, they had made ‘meaningful price reductions’ on about 5,000 properties.
He added: ‘So far, we have agreed sales on 30 per cent of those properties which goes to show that, despite subdued market conditions and the gloom in the wider economy, there remains decent levels of demand for well-priced stock.’
Monthly decline: August’s decline is the biggest fall since December last year
The report also shows that first-time buyers saw prices fall one per cent in the month, but were still paying on average 1.4 per cent more than last year, with the average first-time buyer home valued at £189,145.
Second steppers saw the biggest annual increase at 2.2 per cent to £273,446, while top of the ladder properties saw the biggest monthly decline of 3.5 per cent to £532,294.
Brian Murphy, of the Mortgage Advice Bureau, said: ‘The monthly Rightmove index provides us with an up to date snapshot of consumer sentiment and activity in terms of the UK property market, rather than historical data using completed transaction figures.
‘It would appear that asking prices are reasonably steady, and the 2.3 per cent dip is really the outcome of motivated vendors pricing competitively in order to attract a buyer, which is absolutely in line with seasonal expectations.’