SELLERS slashed their asking prices in November by 3.2 per cent, the biggest monthly fall since December 2007, as they try to attract bargain-hunting buyers.
This is the fourth monthly fall in the past five months and takes the annual change to just 1.3 per cent, down from 2.9 per cent in October. Greater London still leads the recovery, with average asking prices up 3.5 per cent on November 2009.
Miles Shipside, director of Rightmove, said: “The combination of high unsold stocks, the mortgage famine, a shaky economy and the normal winter slowdown gives an ideal scenario for bargain-hunting buyers. The bleak mid-winter is always the best time to catch desperate sellers.”
An unseasonally high number of unsold properties and the longest ever time on the market mean that sellers face tough competition.
Consequently, the number of new sellers fell by almost 10 per cent in November on October, perhaps “as their enthusiasm to sell is blunted by the approach of Christmas and a deterioration in market conditions and consequently their pricing power”, said Shipside.
He adds: “This month’s large price correction shows that new sellers and their estate agents are beginning to show a heightened awareness of the plight of buyers, but a lot of stale stock is still sitting on the market. This winter, it is the sellers that need to be doing the tempting.”
DO YOU THINK WE WILL GET A CHRISTMAS SLOWDOWN IN THE UK HOUSING MARKET?
LUCIAN COOK | SAVILLS
"I think the indications are that it’s going to be a very quiet market over Christmas. The sentiment among buyers is not very strong at the moment and it is weaker outside London. It will be interesting to see what happens to transaction numbers. January is typically quiet but I don’t think we’ll be back to the record lows."
LIAM BAILEY | KNIGHT FRANK
"In the last two months we have already seen quite a considerable slowdown prompted by the difficulty of accessing the mortgage market. The decline in mortgage approvals has been rapid. The December market should be noticeably weaker than last year. Outside of London, the UK market is definitely struggling."
ADAM CHALLIS | HAMPTONS INTERNATIONAL
"In one sense you would expect the typical Christmas slowdown to continue again this year. But we are already at a relatively low level of transactions compared to last year and to the 2005-07 years. So, you would expect any slowdown to be relatively muted because we are already at low transaction levels."