New sellers have reduced asking prices in December by an average of £7,772 (-3.3%) according to Rightmove.
The website said this is the largest monthly decrease it has ever reported, but added that it follows an “established pattern of December drops” over the previous eight years.
“December is the most likely month for sellers coming to market to get very real about the price they ask for their home,” said Miles Shipside, housing market analyst at Rightmove.
“This year they’ve gone a bit further than ever before, though in truth it is symptomatic of the ‘all or nothing’ pattern of 2012. This summer also saw big falls with the distractions of the Jubilee and the Olympics, though prices did rebound in October.
“It seems that sellers who come to market at times when they know that buyers’ attention is focused on other events realise that their prices have to be extra keen in order to compete. Many who put their property up for sale this close to the festive season will have a very good and pressing reason to sell, so Christmas will have come early for those buyers who have been able to bag a bargain.”
Rightmove predicts a slightly more positive albeit patchy outlook for 2013. A key factor in 2012 has been the strength of the London market, where average asking prices ended the year 6.8% (+£29,527) higher. Last month Rightmove reported that the London market was beginning to cool, but next year it predics that the effect of lower price growth in the capital will be compensated for by stronger market conditions and price growth in other southern regions.
It predicts that, on average, The North will experience a continuation of the slight improvement reported in the latter months of this year, though overall recovery will remain much more challenging than in The South. From a national perspective whilst Rightmove’s 2013 forecast is a little more upbeat on the 1.4% rise in new sellers’ asking prices seen in 2012, the balance of pricing power between London and other regions will see a significant shift.
“There are several reasons for a slightly more optimistic market next year,” said Shipside.
“There is a positive combination of lenders with greater funds to lend and buyers with a five-year itch to move. Many movers have had to put their housing aspirations on hold since the onset of the credit-crunch, but increased competition among lenders and the slow but steady increase in affordability of house prices may help some to finally move on.”
The property website predicts that in 2013 transaction levels will remain muted, though a marginal uplift is likely due to a slight relaxation in mortgage lending criteria as the Funding for Lending Scheme (FLS) increases successful mortgage applications.
It foresees greater competition among lenders, fuelled by the FLS and a desire to hit lending targets in the first half of 2013. This will feed through to a slight relaxation in deposit requirements and interest rates for attractive mortgage applicants.
Shipside said: “On top of the small uplift seen in 2012, we anticipate a further marginal but encouraging boost to mortgage lending giving the wider market a generally more positive outlook next year. This will be particularly welcomed by frustrated first-time buyers.”
