Rightmove today released its latest house price index, looking at the average price that UK sellers are listing their property for on the Rightmove website.
According to Rightmove the price of properties listed in December fell by 2.6%, £8,000 per a property compared to the previous month. This is the largest monthly fall in asking prices of properties coming onto the market in five years, with such movement last seen in December 2012, when prices fell 3.1%.
In London this fall grew to 3.7%, the equivalent of £23,000 in cash terms, although Wales was home to the largest fall at 5.2%. But it wasn’t all doom and gloom, with the North East seeing an uplift in prices of 1.3%.
However, Rightmove claimed that asking prices will only grow by 1% over the coming year, the lowest on record since 2011 – if it does happen.
While Rightmove’s latest index may have stirred yet further uncertainty in the UK market, the index is based on the asking price of property coming onto the market and not the price it exits for.
Although the dip might be one of the largest in the last five years, it is no coincidence that the last time a fall of this nature was recorded was also in December and as we approach Christmas, market conditions are far from normal.
With other more concrete indices based on sales completions, such as the Land Registry, showing positive movement over the last few months, it is likely this large dip in asking prices is nothing more than a seasonal lull, as the market continues to find its feet after a tough year.
While asking prices may have dipped, it’s important to note that these are asking prices and not sold prices and so we are seeing sellers price realistically based on the previous slow in the market, not in anticipation of a further decline in price growth.
It’s only natural that with the tough market conditions and the build-up to Christmas, activity starts to wind down on both sides of the fence, but is unlikely that the market will suffer any hangover from the festive period in January.
We’ve seen positive signs of price growth from the likes of Halifax and the Land Registry over the last few months and while this may remain slightly subdued in 2018, prices will continue to climb across the board.
Although London may take a little while longer to dust itself off compared to other pockets of the UK, the capital remains one of the most sought-after where homeownership is concerned. A continued lack of supply along with this overwhelming buyer demand will see the London property market stand tough and eventually return to its former glory.Russell Quirk