Double dip or summer decline? Rightmove House Price Index

Rightmove has this morning issued its September House Price Index.

Rightmove’s House Price Index is compiled from the asking prices of properties coming onto the market via the estate agency branches listing on Rightmove.co.uk, representing around 90% of properties on the market.  Rather than being a survey of opinions as with some other indices, it is produced from factual data of actual prices of properties being listed each month. In the UK around 95% of properties are sold via an agent, while only 75% are purchased with a mortgage.

Its assessment of the property market shows the third consecutive monthly house price fall.  Asking prices by new sellers dropped 1.1% from August to September with prices falling 3.4% in the last three months.  The average property asking price is now £229,767.
The numbers of new properties coming on to the market have also declined.  March, April and May saw 25,000 properties per week coming onto the market but during June, July and August the average was closer to 30,000.  September saw 26,000 properties per week coming to the market being the lowest since April.  Rightmove comment that this is likely to be caused by three reasons stating that;
“The easing of new seller numbers could be attributed to one or a combination of the following reasons:-
The pent-up backlog of more speculative potential sellers that was bottled up by the costs and legal necessity to obtain a Home Information Pack (HIP) has now worked through the system.
A number of owner-occupiers who would traditionally try a pre-Christmas move have altered their strategy. This could be a decision influenced by deteriorating finances and sentiment. 
Interest rates are low enough for those home-owners on the borderline of financial-breaking point to avoid swelling the ranks of forced sellers, alleviating further downward price pressure”
Comparing this to the number of mortgage approvals reported by the CML there are still nearly twice as many properties coming to the market each month compared to mortgage approvals.  Taking into account houses that are removed from sale and cash purchases there still seems to be an imbalance in supply compared to demand.
Rightmove identify that the number of properties for sale per agent has stopped the upward trend since the suspension of HIPS and has now stabilised at 79 properties per agent.
Commenting on whether this is a double dip or an Autumn blip Miles Shipside, director of Rightmove, comments: “The ‘double-dippers’ will be able to point to a clear downward trend, with new sellers dropping their asking prices for three months on the bounce. They can cite tough competition amongst sellers and agents struggling to find proceedable buyers for their record levels of unsold stock. Conversely, we are also recording the lowest weekly run-rate of fresh sellers since April. This will give some ammunition to those forecasting a flatter price trajectory as it could be an early sign of fresh supply beginning to wane. However, whether you think we are bumping along the bottom of a U-shaped recovery or are about to double-dip into a W, your property will need to tick all the right boxes to sell this autumn”.
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