Mon, 18 Aug 08
House prices in some parts of London have fallen by around £21,000 a month, according to latest figures that suggest UK prices have slumped by 4.8% over the last year.
The figures released by Rightmove.co.uk show that from July to August prices fell by 2.3%, which nationally works out at around £5,403 shaved off the average home’s value.
London was the worst hit, recording a monthly fall of 5.3% in August, coming in stark contrast to an increase of 0.3% recorded the previous month.
Areas where prices are holding steady include the south-west of England, which saw a fall between July and August of only 0.4% and the north of England, where prices fell by only 0.9%.
Miles Shipside, commercial director of Rightmove said: “Sellers coming to the market in the middle of the summer holiday season tend to be more motivated. London, in particular, appears to be having its own special summer sale with over £21,000 off in a month.”
He added that a key factor in the rapid rate of decline in prices from July to August is that discretionary sellers, who do not need to sell quickly and are less willing to reduce prices, have simply chosen not to enter the market.
This has left a selling market dominated by forced sellers, who have to sell for reasons such as a change of job and are far more willing to slash prices.
New listings at the property website are down 25% on what it normally sees during the summer months.
Shipside added: “Despite some deals being done at prices that begin to address affordability concerns, the number of transactions this year is in danger of being the lowest since 1959.”
It is worth noting that because Rightmove’s figures are not mix adjusted and can vary wildly from month to month compared to other house price indices.
Rightmove’s figures also do not take into account reductions in prices that sellers make after putting their house on the market.
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