After several consecutive months of price increases in United Kingdom real estate, the improvement stalled in July. However, consumer sentiment remains optimistic with a high majority expecting the market to appreciate next year. For more on this see the following, from Property Wire.
Residential property prices in the UK fell 2.2% in the first half of August as the traditional summer slowdown affected the real estate market.
The latest monthly figures from property website Rightmove show sellers cutting asking prices even further this month in attempt to speed up sales as house prices experienced the biggest monthly fall so far this year.
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Overall the average asking price dropped 2.2% compared with a 0.6% increase in July. Sellers cut asking prices to drive through transactions, said Miles Shipside, commercial director at Rightmove.
The price fall came in spite of a scarcity of stock coming on line and increasing levels of optimism in the market. But Shipside said that the drop was likely to be seasonal as those selling in summer months tend to be more aggressive with prices because they need to sell but know there is a smaller pool of buyers and the figures reinforced the company’s view that prices will bump along the bottom before returning to consistent growth.
Once again he emphasized that it is lack of lending that is holding up a recovery in the real estate market in the UK. The august report indicates that HSBC is one of the more proactive banks attempting to increase its market share of the mortgage market, but currently its reported average loan-to-value ratio is 50% on new mortgage lending and is ‘a perfect illustration of the new era of both caution and cherry-picking’.
‘After several months of activity and prices revving upwards from last winter’s low point, both will start to hit the limit without more mortgage finance. In spite of pent-up demand, the market and pricing is boxed in by restrictive lending criteria put in place to ration mortgages given the lack of funds available to lenders,’ he said.
However, market sentiment continued to improve this month. Rightmove said 75% of home owners did not expect prices to fall in the next year. However, the number of new sellers in August was 48% below pre-recession levels, it added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.