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News: Rightmove: Sellers facing harsh reality

Tue, 22 Apr 08

Home sellers are slowly coming to terms with the brutal reality of the current market...

According to new figures from Rightmove, asking prices in England and Wales have fallen by 0.1% during the past month, as sellers accept their homes are no longer worth as much.

Rightmove's Miles Shipside explained: “People putting their homes on the market are facing the reality and recognising that a decade of rising prices had come to an end. The fall in asking prices seen between March 16 and April 12 comes after they rose by 0.8% in March and soared by 3.2% in February, as homeowners refused to accept the market had turned.

“This is the first time we have recorded a fall during April, with the month seeing an average price rise of 2.8% since the survey began in 2002. The annual rate of price growth has also slowed sharply, falling to just 1.3% during the year to April 12, down from 5% a month earlier.

The average home put on the market in England and Wales now has an asking price of £239,521.

‘Correction overshoot’

Mr Shipside added: “The change in sellers' behaviour indicates that a speedier market recovery would be feasible with co-ordinated action from the Government, Bank of England and lenders. There could however be a correction overshoot unless immediate action was taken to improve mortgage liquidity and enable lenders to raise funds.

"This reasonable correction in the housing market is in danger of being taken to unreasonable extremes if the freezing of the mortgage liquidity continues. The ongoing lack of mortgage funds could trigger a price crash if an increasing number of sellers were forced to seek relatively rare cash buyers or those with large deposits”.

The fall in asking prices was far from uniform across the country, with seven regions of England and Wales seeing price rises, led by East Anglia where they soared by 5.5% and the West Midlands, where they jumped by 2.9%. But at the other end of the scale, asking prices slid by 1.4% in the North West, while they dropped by 0.9% in London and 0.1% in the South East

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