Asking Prices Plummet To Woo Buyers

The latest set of figures concerning house prices suggest that the asking price is tumbling. Figures from property website Rightmove show that the asking price for a typical home has plummeted by over £11,000 since October which equates to a fall of £120 a day, and experts say that 2008 looks like being a bleak year for the property market.

Prices fell for the third month in a row, and have dropped by almost 5% since October, with a 0.8% drop in January. For anyone who has stretched their finances to buy a home in the last few months this news will come as a blow.

For an average home in October the asking price was £241,642, but it is now down to £230,428 – a drop of £11,214. Rightmove’s figures show that house prices are 3.4% up on a year ago – the lowest annual house price inflation for two years.

This makes house price inflation less than the retail price index, which is 4%, also for the first time in two years.

For some properties the story is much worse than others. Asking prices have fallen by as much as 40% for some properties, according to website Property Snake, which focuses on properties whose prices have been cut drastically.

There are regional variations behind the figures. Prices are still rising in London and the North, but the biggest falls are in the East Midlands where prices have dropped by 6.1% in January to £167,235.

Forecasts for a fall in the property market have been coming thick and fast for the past 12 months, but the last six months has seen a trickle of evidence become a flow as first, the rise in interest rates took its toll, and then the credit crunch with all its repercussions for borrowers, has begun to have an impact.

Last week the Royal Institution of Chartered Surveyors indicated that property prices are falling at their fastest rate since the last property crash in the early 1990s.

Miles Shipside, Rightmove’s commercial director, said: “Some properties have had their prices dropped by 10% or more.”

The good news is that many homes are now in the ‘affordability zone’ for homebuyers who used to be frozen out of the market. Shipside continued: “Enough sellers seem to have dropped their prices to encourage potential buyers to look in larger numbers, suggesting we might see a more active market at this lower price level.