Experts on why June saw an ‘unusual’ house price fall
According to a property website, the average asking price for a house in England fell by 0.6% in June; This equates to a fall of £2,113, the most significant fall recorded for this month in 14 years.
This month-on-month decline has brought the average asking price across the country to £376,191, Rightmove reports. The real estate portal stated that moderate price increases were generally seen in June. The report suggested that an above-seasonally warm May may have triggered the usual summer slowdown earlier than expected this year, while the World Cup may have distracted some potential home movers.
Rightmove also observed that Britain’s more affordable areas, including North East England and Scotland, showed relative stability in prices compared to the same period last year.
Rightmove property expert Colleen Babcock said: “It is unusual to see a price drop of this size in June as we would normally expect to see a moderate price rise at this point in the year.
“What is different this time is that a combination of factors such as wider economic uncertainty, the timing of the May bank holiday and the unusual heatwave and large number of homes on the market appear to highlight the traditionally slower summer market.
“In this type of market, sellers have to work harder to attract attention.
“Setting a competitive price from the start is key as buyers take more time to compare options and act quickly if a home doesn’t stand out for its value.”
Rightmove said high mortgage rates continue to weigh on activity as many household budgets tighten, while a wider choice of homes for sale is encouraging buyers to take a less urgent approach unless a property really stands out.
Ms Babcock added: “Whilst the summer market has arrived a little earlier this year, overall activity is still within a typical historical range.
“What has changed is some buyer behavior; with more homes to choose from and higher borrowing costs, buyers are thinking more and taking longer to make their decisions.”
Matt Smith, mortgage expert at Rightmove, said: “It’s encouraging to see mortgage rates falling slightly, and even relatively small discounts can make a difference to buyers’ budgets.”
The report, published as a separate index from property firm Hamptons, showed that the average price of a newly accepted rental in Britain rose 1.1% in the year to May, slowing from a 1.2% annual rise in April.
The average rent paid by a tenant moving into a property in England was £1,382 a month in May, the Hamptons said.
Regionally, the average new lease rent in the South East of England reached £1,500 per month in May, up 2.0% year on year.
The Hamptons is the first time rents have reached the £1,500-a-month level in any area outside London, he said.
Aneisha Beveridge, head of research for the Hamptons, said: “With rent increases on newly agreed properties remaining low by recent standards, landlords appear to be taking a more cautious approach when choosing new tenants.
“Many people seem willing to wait for the right tenant rather than accepting the first offer, which has reduced the number of homes rented and helped limit rent increases for new tenants.”
The Hamptons monthly rent index has been running since 2011 and uses data from Connells Group to track changes in rental costs. The index is based on rents achieved rather than advertised rents.
According to the Hamptons, the average monthly rents and annual changes of newly rented houses in May are as follows:
London, £2,294, 0.6%
East of England, £1,225, 0.3%
South East, £1,500, 2.0%
South West, £1,265, 0.9%
East Midlands, £987, minus 0.9%
West Midlands, £1,107, 2.6%
North East, £856, 3.8%
North West, £1,042, 1.8%
Yorkshire and Humber, £927, 1.4%
Wales, £887, 1.1%
Scotland, £1,029, 0.6%
