U.K. Home Prices Fall for First Time This Year as Sellers Struggle to Sell
U.K. home sellers lowered asking prices in July for the first time this year as a mortgage squeeze deterred buyers, Rightmove Plc said.
Asking prices dropped 1.6 percent from the previous month, when they had gained 0.6 percent, the U.K.’s biggest property website said in an e-mailed statement today. Seven out of 10 properties listed in 2011 are still available for sale, which Rightmove described as a “sobering reflection” of the market.
“We expect further falls over the next few months as buyer momentum ebbs away due to a combination of seasonal factors and a continuing lack of both mortgage finance and buyer confidence,” Miles Shipside, commercial director of Rightmove, said in the statement.
Values are up 0.1 percent from a year earlier to an average 236,597 pounds ($382,000). The monthly decline is the first since December, when asking prices fell 3 percent.
Seven of 10 regions tracked by Rightmove showed declines in July from June, led by a 3.5 percent drop in East Anglia. Asking prices in London fell 1.4 percent to an average 432,641 pounds, though they are still up 2.5 percent on the year.
The capital “is a less price-sensitive location than other parts of the country,” Shipside said. Nevertheless, “many of its buyers still require finances and so are also susceptible to the tightening of mortgage lending, pressure on income and the rising cost of living.”
U.K. mortgage approvals have stayed below 51,000 in every month since the end of 2009, compared with 128,512 at the end of 2006, before the onset of the global credit squeeze, Bank of England data show. Banks approved 45,940 home loans in May.
The central bank left its benchmark interest rate at a record low of 0.5 percent this month to support the economic recovery through the biggest fiscal squeeze since World War II. Minutes of the decision will be published July 20.
To contact the reporter on this story: Jennifer Ryan in London at email@example.com
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org