House Price Update to 18 August 2010

UK House Prices Situation: New sellers dropping prices

UK House Prices Forecast: Continued weakness for the rest of 2010

Prices Down 1.7% in August

Asking prices fell by an average of 1.7% in August, according to new figures from property website Rightmove. Although August is traditionally a month when prices fall, Rightmove's Commercial Director Mile Shipside says that the number of new sellers coming to market in August could be a cause for concern:

"No one really wants to come to market in August unless they have to. It shows these new sellers have a compelling need to sell, as they have lopped over £4,000 off the average asking price."

August's fall means that asking prices have fallen for two consecutive months, following their 0.6% fall in July. This is consistent with evidence that shows that the growth in housing stock for sale is outstripping the number of available buyers.

Rightmove's figures show that average stock per estate agent rose in August for the sixth consecutive month. In August, an average of 29,220 new properties per week came onto the market – up from just 20,675 last year. In comparison, new mortgage approvals in June (the latest available figures) were at an average of just 13,852 per week, according to the Bank of England. While not all property purchases require mortgages, these figures do seem to provide evidence of an ongoing shortage of affordable mortgage deals.

Shipside said "We predict that the gains made so far this year will have dissipated by year end", observing that although prices rose by 7% from January to June, they have already fallen again by 2.3% over the last couple of months.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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