House price growth could be wiped out by year end

August 5, 2010

With the constant barrage of house price reports it’s hard to keep track of exactly what is happening throughout the UK, but if the latest one is anything to go by, prices now look set to fall.

New sellers have dropped asking prices in July for the first time this year, as properties continue to flood the market, which means the gains made in the first half of 2010 could be wiped out by the end of the year.

The average asking price of a home in England and Wales has risen by 7% since January, peaking at £237,767 in June, according to property website Rightmove.com.

Rightmove the property website reported that an average of 30,000 new homes are currently being put up for sale each week, 45% more than during July last year.

The average number of properties that estate agents have on their books has risen for the fifth month in a row, the highest level since August 2008. As a result, there are now five new properties on the market for every two potential buyers who have a mortgage approved.

While the flurry of activity makes for a potentially strong buyers market in the second half of 2010, it’s not complete doom for sellers when the research figures are put in context.

While average asking prices fell in some regions: by 2.3% in East Anglia and 2.1% in Greater London, asking prices have risen for July in other areas. The South West, Wales, West Midlands and East Midlands all saw a rise, with the South West leading the way with a rise of 2.8%.

So, while it’s not the news many homeowners may have been hoping for, it’s simply proof that there’s still a long way to go before any price rises can be considered a stable sign of recovery.

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