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House prices drop 1.6% and expected to fall further

This is the first recorded fall of 2011, according to property website Rightmove.

House prices drop 1.6% and expected to fall further

House prices dropped 1.6% in July, the first recorded fall this year, according to a new survey from Rightmove. This is the largest July fall since 2008, the property website claims.

Houses meanwhile aren’t selling, with seven out of 10 properties marketed so far this year still on the market. This indicates that many equity-poor sellers are unwilling or unable to reduce their prices further and is an opportunity for the equity-rich to cut their prices and do deals, Rightmove said.

The number of new sellers is also down 12%, as many owners are unable to raise the deposit needed to fund their next move.

Miles Shipside, director of Rightmove said: ‘Summer sellers are more nervous about their selling prospects than the early birds who asked ever higher prices during the first six months of this year’.

‘Early sellers in 2011 had a chance of worming their way into the more active spring market, whereas those coming to market now at the onset of the holiday season have to price more aggressively as many buyers have already gone to ground,’ he added.

‘The highest level of interest in your property will be in the first week it comes on the market — and first impressions count', Shipside warned. 'Make sure it’s looking its best from day one, that you offer better value than any similar property locally, and when you’ve got those two right then make sure your agent markets the socks off it so it really stands out'.

Looking forward Rightmove said it expects prices to fall further as buyer momentum ebbs away due to a combination of seasonal factors, low confidence and lack of mortgage finance. The current level of retail price inflation however is reducing property prices in real terms, improving buyer affordability. 

Not all reports however agree with Rightmove's findings. According to recent surveys from Hometrack and Royal Institution of Chartered Surveyors (Rics), house prices have been falling for months now, while Nationwide claims prices are likely to remain flat.

In our video 'Why are there so many house price surveys' we explain how house prices can seemingly be up, down and flat all at the same time. 

11 comments so far. Why not have your say?

barry watson

Jul 18, 2011 at 12:26

I see the governments plans to get things going are really working then

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Jul 18, 2011 at 12:29

House prices have not fallen - Asking Prices have!

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John Lacy

Jul 18, 2011 at 12:41

Victoria you really do need to take a holiday or go and work for Rightmove instead.

The problem as usual stems from your basic lack of understanding as pointed out by JMT. A fall in asking prices means not a jot other than there is a little reality returning to a badly over-priced market.

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Jul 18, 2011 at 12:46

In some areas the asking price is 30 to 40% higher than the accepted offer.

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John Lacy

Jul 18, 2011 at 13:10

Jonathan---If this were true anywhere it would be madness of the first order. Most clients do computer searches to a maximum figure so if you had a client looking to buy at £150,000 by your thinking the asking price they would need to search might be as high as £250,000. Even the most blinkered and brain dead agent wouldn't want a client to be that far out of line with reality.

I suspect you're talking bollocks!!

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Anonymous 1 needed this 'off the record'

Jul 18, 2011 at 13:14

"The current level of retail price inflation however is reducing property prices in real terms, improving buyer affordability."

Surely this is only true if wages/salaries are tracking RPI. Mine certainly isn't, I would say most are flat at best.

Anything other than zero or below and house prices are still becoming more unaffordable.

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Jul 18, 2011 at 13:59

John Lacy,

I think you need both a maths lesson and a civility one. If the buyer's budget was £150k then 30% to 40% higher is £195k to £210k not £250k

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John Lacy

Jul 18, 2011 at 15:48

Jonathan ---it depends which way you do the calculation. Your answer is right if you work 130% or 140% above the £150,000. If you take the view that the buyer has acheived a 30% to 40% reduction from the asking price my figures are accurate.

These figures may be possible on an individual exception rule but I reiterate my point that any estate agent (and these are the people entering the information on Rightmove) would regard it as sheer folly to be that far away from the expected price. Lots of the properties that would be pertinent would just not be shown as very few people would search that far above their budget price.

Sorry to be crabby earlier but I'd just spent 25 minutes trying to get someone in the Halifax to answer the 'phone and that always winds me up.

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Jul 18, 2011 at 16:03

John Lacy,

My wording was a straight forward simple sentence. It was worded "the asking price is 30% to 40% higher than the accepted offer" not "the accepted offer is 30% to 40% less than the asking price". These are two different statements with different answers. I also said "in some areas" which means "not everywhere".

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Dislexic Landlord

Jul 18, 2011 at 16:08

its got to go down is anyone suprised

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Jul 18, 2011 at 22:49

Told you so

House prices have failed to keep up with inflation - so housing is becoming cheaper in real terms

Now absolute house prices are falling - and will fall further

Bargain time for buyers

But you need nerves of steel or solid rental income to be buying these days

For most, the best and safest option by far is to KEEP RENTING

Fast, flexible, easy...renting is the way forward unless you fancy gambling your life's savings on a house

You know it makes sense

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