Rightmove is forecasting further price falls and no rise in transaction levels for next year, in predictions that the industry may believe but not want to hear. This morning, it reported that asking prices of properties new to the market have dropped 3% – or an average of nearly £7,000.
Even in London, house values finally no longer seem immune to the rest of the market. In November, the average London house price was £420,248, but this month they have dropped almost £12,000 to £408,789.
Asking prices for UK properties as a whole, placed on the market between November 7 and December 4 – 73,108 in all – averaged £222,410.
While December’s average asking price is lower than November’s average asking price of £229,379, there is still a yawning gap between asking prices and sale prices, as reported by the Land Registry, Nationwide and Halifax. All three currently put the average selling price at around £164,000, suggesting there is some way to go before asking prices align with achieved prices.
In this morning’s report, Rightmove said that agents were finding mortgages difficult, following a further tightening in lending criteria in the middle of the year.
It said: “We cannot foresee a set of circumstances that would promote an increase in transaction numbers in 2011 beyond the 550,000 to 650,000 range the market is currently operating in.”It forecast that “it could take as long as 2015 before transaction levels become relatively meaningful when compared to previous norms”.
Commercial director Miles Shipside warned: “Sellers are going to have to price more competitively in 2011, though it takes time for that message to get through in the absence of another banking crisis.”
While Rightmove is not forecasting big price falls, it thinks they could drift 10% lower compared with where they stood halfway through this year. It is forecasting a drop of 5% throughout next year.
The portal is forecasting another bad year for first-time buyers, tenants (who face rising rents) and for forced sellers, but a good year for landlords (who should see rising rents) and property buyers with cash.
