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Monday, August 15, 2016

Asking prices fall post-Brexit

Some truly post-Brexit data has landed on the Property Hawk virtual doormat.

Rightmove's House Price Index for August has asking prices on properties coming to market down slightly, at 1.2% or £3,602. Don't panic though, this drop only echoes the summer slowdown expected at this time of year.

average asking price rm august 2016

Miles Shipside, Rightmove's market analyst reflected on the data:

“Many prospective buyers take a summer break from home-hunting, and those who come to market at this quieter time of year tend to price more aggressively. This summer is also affected by both Brexit uncertainty and the aftermath of the buy-to-let rush in March to beat the stamp duty deadline. Most sellers seem to recognise that buyers may want some extra encouragement to get them to put their towel on a property to reserve it as well as on their sunbed! The average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long-term average. The largest price falls at this time of year were -2.0% and -1.3% in 2014 and 2010, with the smallest fall being -0.8% in post- election boosted 2015.

It will be welcome news for some northerners that the traditional north-south divide may be taking a rare turn in their favour. London has seen its price boom curtailed by punitive stamp duty and over-stretched affordability and has been in re-adjustment for a year or more, mostly affecting Inner London. At this time of year interest from buyers of more expensive properties that typify much of London and its commuter belt tends to tail off more, as they are often discretionary movers. Having waited for the referendum result, it now seems that some are also waiting until the summer holidays are over before reviewing their course of action.

There is pent-up demand with potential buyers still enquiring in very large numbers though obviously more muted compared to 2015’s post-election highs. While the summer sales slowdown has come early in some locations with the run-up to the referendum subduing activity in May and June, there are still hundreds of thousands of buyer enquiries every week. Buyers can often get a better deal at this time of year if estate agents match them up with motivated sellers. By autumn we should get a clearer view of the strength of any post-referendum hangover, though that also depends on buyers’ confidence to turn this interest into action. The latest interest rate cut making already cheap-to-borrow money even cheaper should act as an added boost to confidence.”

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