London Asking Prices Fall in July as Homes Market CoolsJennifer Ryan
Asking prices for London property fell for a second month in July as an increase in the number of homes for sale softened the market for sellers, Rightmove Plc said.
Prices sought in the U.K. capital fell 0.4 percent from June to an average 587,174 pounds ($1 million), the property-website operator said in a statement today. Across England and Wales, prices fell 0.8 percent, their first decline since December.
The report adds to signs the U.K. property market is losing steam, after the Bank of England said it posed the greatest risk to the economic recovery. Financial-stability officials set a cap on loan-to-income ratios last month to prevent a surging prices leading to an excessive buildup of debt.
The declines are “a sign of some sellers asking beyond what buyers and lenders judge to be affordable or fair value,” Miles Shipside, director at Rightmove, said in the statement. “Market conditions still compare favorably with this time last year, with growth in both the economy and employment, plus a comparative thaw in mortgage availability.”
The number of properties offered for sale in London is 15 percent higher this year than the same period in 2013, according to Rightmove. New sellers rose 28 percent from a year earlier.
The decline in the capital was led by three districts, Islington, Wandsworth and Kingston, which each fell 3.8 percent on the month. Nationally, of the 10 regions tracked by Rightmove, seven posted declines. These were led by 1.9 percent falls in the East Midlands and the North.
Rightmove today refined its forecast for 2014 house-price growth to 8 percent from a previous prediction of 6 percent to 8 percent.
A stronger pound may also be deterring foreign buyers by making U.K. assets more expensive, Rightmove said. The U.K. currency reached $1.7192 on July 15, the highest since October 2008.
That point was echoed last week by Deutsche Bank AG economist George Buckley, who said the gains in sterling along with global economic weakness and the withdrawal of BOE stimulus may sap demand for homes in the capital.
“There seem to be more downside than upside risks to London housing going forward,” Buckley said. “While we do not expect a crash in London property prices, we do expect price pressures to ease going forward and would not be surprised to see outright falls in asking prices.”