House prices have stagnated and sales are stalling as Britain’s residential property market shifts in favour of buyers rather sellers, reports The Telegraph.
UK values edged up by just 0.1 per cent from July to August for the second month in a row, a new report from data specialists, Hometrack, found.
Weakening demand and an increase in the number of sellers putting their homes on the market means that transactions took twice as long to complete in August as they did six months ago, forcing vendors to slash their prices.
Sellers in England and Wales typically achieved 95.9 per cent of their asking price in August, falling back for the third month in a row from 96.8 per cent in May.
If that percentage drops to 94 per cent then prices will start to fall, the property analysts warned.
Stricter lending rules that came in at the end of April, consumer caution ahead of likely interest rate rises, as well over-inflated prices, have been blamed for dampening demand.
House price growth in London is continuing to under-perform the rest of the country as buyers become more “price resistant”, following record values hikes seen in the capital in the first half of the year.
Just 11pc of London postcodes recorded month-on-month increases in property values in August, compared with 19 per cent of markets outside London.
Hometrack’s data also showed that 87 per cent of London postcode districts saw prices increase month-on-month in February, compared with 11pc this month.
The impetus for price growth now coming from the commuter belt towns in the south-east as Londoners capitalise on the high prices in the central boroughs and migrate out.
“We’ve reached the usual point where buyers go no thanks,” said Ed Mead, the managing director of estate agent, Douglas & Gordon. “Whenever this happens there’s a three-month hiatus whilst sellers readjust their sights. Asking prices had overshot and a plateau in selling prices to be expected.”
The typical time it takes to sell a London property has almost doubled since February, from just over two and-a-half weeks to nearly five weeks.
This is still around a week less than the average across England and Wales, where the time it takes to sell a home has edged up to just over six weeks.
Property prices were unchanged month-on-month in August in London, East Anglia, the North East and the North West, increased by 0.1 per cent in the South West, the East Midlands, Yorkshire and Humberside and the West Midlands and rose by 0.2 per cent in the South East.
The strongest month-on-month growth was seen in Wales, where prices recorded a 0.5 per cent increase.
Hometrack’s new data followed a forecast released earlier this week by property group, Savills, which predicted a slowdown in London house price growth but a pick up in property values in the Midlands and the North later this year.
This was echoed by the London estate agents, Foxtons, on Wednesday.
At its half year results the management also warned of a cool down in the capital.
Image: Housing market via Shutterstock