Following the release of Rightmove’s December House Price Index it has been reported that December sellers have cut asking prices by 3% (£6.969) meaning we have now had falls in 5 of the last 6 months and Rightmove are forecasting more of the same for 2011. Sellers will continue to drop their prices with the national average falling by up to 5% if repossessions increase substantially.
Rightmove say that 2011 will be a good year for Landlords, the job secure home owners moving up the housing ladder and also buyers who are deposit rich. 2011 will however be a bad year for those who are forced to sell, equity and deposit poor, tenants and the first time buyers. The pent-up demand for the fewer marketed properties will be more than off-set by the high risk of unemployment, an increase in forced sales, a base rate rise and the current strict mortgage lending criteria.
If base rates do increase then repossession numbers could form a much larger percentage of total sales. At an extreme this could lead to even greater price falls than Rightmove are forecasting.
At the other end of the spectrum London has seen a positive end to 2010 and Rightmove have forecast that London sellers will raise their average asking prices in the region of between 3 and 5%.
Miles Shipside, Director of Rightmove comments:
“While the rest of the country will be struggling with more forced sellers putting downward pressure on prices, sellers in the capital can again rely upon both domestic and international demand for homes in London to keep this year’s positive price momentum going into 2011. There will be monthly ups and downs, but we foresee a further small rise will play out by the end of the year.”
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