News from Rightmove today stated the average asking price for a house in the UK jumped 0.9% (up to £264,875) on month in September which followed the 2.9% contraction in August. London saw prices edge up by 0.9 per cent over the month to reach £557,792 on average
A response from Russell Quirk, Founder & CEO of eMoov.co.uk, the UK’s leading online estate agent.
“Today’s latest analysis on the housing market makes for positive reading for the nations home owners. But let’s remember that the Rightmove numbers are a focus on asking prices only, not sales outcomes.
It’s clear that the rate of increase in pricing is slowing and which indicates that sellers are becoming more realistic, especially in the capital.
But this is a good thing. The media hyped increases in value over the past 12 months or so, especially in London, were completely unsustainable and this cooling will make for a more sensible balance in the short to medium term. It may even stave off an interest rate hike given the Bank of England’s prior warnings that an overheating housing market would trigger such a reaction.
The eMoov.co.uk Property Hotspots Index which was released last week highlighted the decline of demand in London. In February 55% of all properties listed in London had an accepted offer on them, this dropped to 50% in June and in September this has slumped down to just 41%. Properties are taking longer to sell, meaning there has been a shift in power from seller to buyer.
All eyes are now fixed on Scotland ahead of the independence vote, which could see a house price shake up north and south of the border.
General economic uncertainty as a consequence of Scotland going it alone and discord over their currency position when they ditch the pound will hardly make for a robust dynamic. In precarious times, one of the first things to suffer will be jobs. Unemployment means home repossessions and a downward pressure on home values as a consequence. The result for house prices north of the border is potentially catastrophic.
The average house price in Scotland is £160,000. A 20% drop in values (which we could easily see) would mean a £32,000 loss on the typical house price. Given that the Scottish market has not yet returned to its peak levels of 2007, we could see mass negative equity and severe hardship for many.”