This morning’s shock housing market data – with asking prices down 1.2% nationally in just one month, the biggest July fall in over 20 years – masks significant regional variations.
Rightmove says London has seen the biggest regional monthly price fall at -1.5%, driven especially by Inner London.
The portal believes April’s increase in residential stamp duty in England has had a greater impact in London where property prices are higher, while last year’s increase in stamp duty for investment and second homes will also be having an effect.
Additionally, changes to non-dom tax rules and uncertainty around future tax changes may be affecting investment into the central London market.
London represents about 10% of the housing market by volume.
The North East, which is the least expensive region of Britain, has seen a 1.2% increase in prices this month, continuing the trend of cheaper areas seeing faster price growth.
Realistic and competitive pricing from new sellers in response to the high-competition market is driving an increase in buyer activity.
The number of property sales being agreed is 5% higher than at this time last year, and highest at this time of year since 2021.
And Rightmove adds that the number of potential buyers contacting estate agents about available homes for sale is 6% higher than last year.
Another knock-on effect of the more muted price trends is improved buyer affordability. The average new seller asking price for a home in Great Britain is now just 0.1% higher than a year ago, while average earnings are up by over 5%.
Additionally, Rightmove’s mortgage tracker shows that the average two-year fixed mortgage rate is now 4.53% compared with 5.34% at this time last year. For someone purchasing a home at the average asking price, this equates to a saving of nearly £150 per month on a new mortgage over 30 years and with a 20% deposit.
However this month’s overall asking price drop means Rightmove is now expecting the average asking price for a home to rise by 2% rather than our original forecast of 4% over the whole of 2025.
A statement says: “We do expect the annual rate of growth to increase from its current 0.1%, as the level of buyer activity is encouraging, but the decade-high supply of homes on the market is limiting that growth.
“Rightmove is also retaining its forecast of 1.15 million transactions in 2025. The overall market outlook remains positive for the second half of the year, and if the two currently forecast Bank Rate cuts go ahead as expected this would further stimulate buyer affordability.”
This article is taken from Landlord Today