The Seasonal August fall is house prices has been more muted than usual, with price of property coming to market down by just 0.8% (-£2,258) compared to post-credit-crunch average August fall of 1.5%, according to Rightmove.
It said the shortage of new sellers (down 8% on same period in 2014) and active buyers help to minimise usual summer holiday price falls, and result in least generous August price discount from sellers since 2007.
Miles Shipside, Rightmove director, said: “While new seller asking prices have been muted by the traditional summer holiday property slowdown, the underlying shortage of property coming to market compared to buyer demand has helped to deliver the strongest August price performance since before the credit crunch.
“Buyers can normally pick up some bargains in August as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively. At 0.8% down on the previous month, this is the least generous that sellers have had to be for eight years and a clear sign of upwards price pressure in the pipeline.”
Rightmove said its year-on-year statistics show that the number of properties coming to market this month compared to the same period in 2014 is down by 8%. A factor in this is the lack of new-build supply over the last 20 years, exacerbated by current new home volumes still being well below the levels reached just before the credit crunch. The historic new-build shortfall results in there being a smaller overall housing stock available to come to market, while the current new-build shortfall also limits the number of existing property owners who are looking to sell their house in order to buy the limited number of suitable brand new homes available, the firm said.
Shipside said: “The shortage of suitable property being built exacerbates the vicious circle of not enough property on the market to meet demand, increasing prices, and a reluctance among home-owners to come to market if they think the prospects of finding and funding their next move are severely compromised.
“These stay-away sellers who are seriously considering a move but have yet to put things into motion have concerns around a shortage of choice and stretched affordability. They could be helping to get the country’s limited property stock circulating, but they have concerns about coming to market, deepening the supply shortages affecting many areas.”
Jeremy Duncombe, director of Legal & General Mortgage Club, added: “The summer is seeing fewer new sellers, with August offering potential buyers the smallest price reduction seen in this month since 2007. It’s no surprise that house price inflation has increased on the same period last year as the imbalance between supply and demand has made for a competitive market for people looking to buy. Rising wages and low inflation are driving more people to the market, and unless housing construction is ramped up significantly, house prices will climb beyond people’s reach in future months.
“It’s vital that the Government acts to boost housebuilding to make homes more affordable and to ensure that there are homes available for people to buy. It’s also paramount that these houses are built to suit the needs of people across the market, from first to last time buyers. The government’s current policies that aid first-time buyers in getting a foot on the ladder are welcome, but more support is needed for other people whose options are limited due to high asking prices and the lack of supply.”