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House prices still ‘bumping along the bottom’

Asking prices dropped 2.1% in August as activity in the market remains subdued, according to property website Rightmove.

House prices still ‘bumping along the bottom’

House prices fell 2.1% in August and are 0.3% lower compared to this time last year, according to Rightmove. This is the first year on year drop in asking prices since September 2009, the property website said. The number of sellers meanwhile remains subdued at 30% below August 2007 levels.

The impact of renewed financial turmoil on the property market is 'likely to be limited' because prices are already ‘bumping along the bottom,’ Rightmove said. There is concern however that the current debt crisis in the eurozone and United States could increase pressure on lenders, freeze the credit market again and drive down sales.

Miles Shipside, director of Rightmove said: ‘We’re in a ‘limbo-land’, where a restricted number of motivated sellers are trying to match themselves up with the similarly restricted number of financially capable buyers. In many parts of the country transaction levels are limited to the number of sellers who are willing to price aggressively below the competition and can afford to do deals’.

‘It seems that this stalemate can continue indefinitely, until it is broken either by an improvement in upside factors, such as a relaxation of mortgage finance, or by a further marked deterioration in employment and a corresponding increase in forced sales at bargain-basement prices,’ he said.

‘We are four years into this journey, and it still looks like a long road ahead,’ Shipside added.

Last week the Royal Institution of Chartered Surveyors (Rics) claimed that with pessimism still surrounding the market prices are likely to continue to fall in the coming months. Halifax and Nationwide on the other hand expect prices to remain flat for the rest of the year.

1 comment so far. Why not have your say?

Dislexic Landlord

Aug 15, 2011 at 17:23

Weare going to have falls for a long time to come plain and simple

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