Asking prices slip back in August

The average asking price of a UK home fell in August, after nudging up 0.6% in July.

Vendors shaved a typical £5,102, or 2.2%, off their ambitions as they adjusted to lower seasonal demand.

The decline took the average asking price back to £222,762, compared to £227,864 in July, although London saw a steeper slide at 3.8%, reducing the average asking price in the Capital to £387,265.

However, buyer interest remained strong with record traffic from “marginal” buyers, a group described by Rightmove as those with “restricted loan parameters”.

The “creditworthy” also kept the website busy, trawling for quality homes which remain in short supply.

The number of new sellers in the month to mid-August stood at 82,700, 23% fewer than in the same period of 2008 and “dramatically down” on pre-credit crisis numbers of 149,000 and 167,000 for 2007 and 2006 respectively.

The firm’s commercial director, Miles Shipside, comments: “In spite of pent up demand, the market and pricing is boxed in by restrictive lending criteria put in place to ration mortgages given the lack of funds available to lenders”

In a gloomy summary he adds that future price and transaction growth is governed by the “bottleneck” of mortgage availability, with change unlikely even in the medium term.

Referring to recent research from the Centre for Economics and Business Research, Mr Shipside concedes that mortgage application levels could “remain well below the levels seen in the early part of this decade as far ahead as 2013.”

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