Falling London house prices puts buyers in the driving seat
Falling London house prices are at last getting real: average asking prices have fallen in two out of three boroughs over the past year, according to a new study.
Admittedly the average drop has been minimal – around one per cent – bringing the asking price of the average London property to £637,746 according to the Rightmove House Price Index, published today.
But more substantial falls have been witnessed in Hackney (3.7 per cent), Hammersmith and Fulham (3.9 per cent), and Ealing (4.5 per cent).
Across London, however, there is good news for house hunters.
There has been a significant 16.4 per cent increase in the number of houses and flats on sale in the capital over the past 12 months, giving buyers substantially more options.
Tom Bill, head of London residential research at Knight Frank, said the increase in supply was partly down to some homes simply taking longer to sell. There has also been an uptick in investors selling up rental stock. “This is the result of recent tax changes for landlords which, combined with a perception that sales values are bottoming out in some areas, has led to higher levels of supply in the sales market,” said Bill.
Whatever the reason, the advice to vendors is to opt for a “summer sale” strategy if they really need to sell in a “challenging” market.
Annual house price changes in London
Hover over each borough for average price in June 2018 and the percentage change over the past year plus the past month. Based on the Rightmove House Price Index for June 2018
“With the normally more active spring buyer market over and with some potential buyers likely to be distracted by summer holidays and World Cup-itis, the goal posts have just moved,” said Miles Shipside, Rightmove director and housing market analyst.
“Sellers in locations that have seen larger percentage increases in the number of available properties will have to price lower than properties they are competing against, as there are few better tactics than a bargain price to tempt buyers.”
Tom Page, manager of Fyfe Mcdade estate agents in Shoreditch, agreed. “There is no space for immature pricing in today’s market,” he said.
“There used to be an argument for pricing a property high and trying your luck. However, there are no longer enough buyers in the market for overpriced properties to get attention.
“Buyers are more informed and stick more rigidly to their budgets. Pricing a home realistically will lead to maximum impact on initial marketing meaning more enquiries, more viewings and potential offers.”
Even with a correctly priced home, buyers keen to move in advance of the start of the new school year in September are cutting things very fine. According to Rightmove, property now takes an average of 67 days to sell in the capital, compared to 59 days a year ago.