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Seasonal slowdown in property market

Property asking prices fell for the second month in a row during December as the market suffered its traditional seasonal slowdown, research showed today.

The 2.2% drop left the average property put up for sale in England and Wales during the four weeks to December 5 nearly £5,000 cheaper at £221,463, according to property website Rightmove.

But despite the fall, which came as the number of homes for sale hit its lowest level for 21 months, house prices are still 1.7% higher than they were 12 months ago.

All areas of the country saw a fall in asking prices during the month, except East Anglia, where they rose by 0.5%.

The North saw the biggest price slide at 5.8%, followed by the North West and South East, both at 4.3%.

Miles Shipside, commercial director of Rightmove, said: “Sales volumes are still set to remain well down on historic norms, with the consequent thin-market danger of relatively small changes in economic fundamentals having a marked impact on asking prices.

“We have already seen how some local markets have been adversely affected by over-supply of property and a lack of mortgage-ready buyers, and more areas could become similarly blighted if forced sales increase later next year as expected.”

The group expects only around one million homes to change hands during 2010, half the level seen in 2007.

At the same time, the supply of rental properties is expected to fall as accidental landlords, who rented out their home after being unable to sell it, put their property on the market again.

Mr Shipside said: “Existing landlords will find themselves in an increasingly privileged position in 2010, where competition from new landlords is frozen out by a dearth of buy-to-let mortgages.

“In addition, tenant demand and landlords rental returns will grow due to demand from those who are unable to buy.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .