Rightmove: Homeowners becoming more realistic with selling prices

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by Kay Murchie

Property website Rightmove has today revealed that asking prices dropped by 0.4% in June bringing an end to the four consecutive monthly rises.

The asking price for the average home fell by over £1,000 to £226,436 but the group highlighted that asking prices are still 6% higher than the beginning of 2009.

According to Rightmove, a north/south divide is clearly emerging with vendors in East Anglia being forced to cut the asking price by an average of 6.6%. Meanwhile, sellers in London have trimmed asking prices by just 0.1% in June.

However, demand across the North West and East Midlands has meant sellers have been able to raise their asking prices by around 4%.

Rightmove has highlighted the chronic shortage of new properties being put on the market, despite a 10% increase in sellers during the month.

Furthermore, the group is concerned about the mortgage market as lenders continue to hike their rates and continue to demand hefty deposits from first-time buyers. The average deposit required by first-time buyers is currently at an average of 25%.

According to Rightmove, there are concerns that the rise in the cost of mortgages could undermine the tentative signs of stabilisation in the housing market.

In related news, Bank of England (BoE) figures revealed last week that over 16,000 mortgage applicants are being turned down each month.

The figure stood at 12,000 last December but has risen since March.

It is the first time these types of figures have been released by the Bank and highlight that lenders are still picky about who they lend to.

The BoE figures were released just a day after the Council of Mortgage Lenders (CML) reported that mortgage lending fell by 58% in the year to May 2009.

Gross mortgage lending totalled £10.3 billion in May, 2% down on the £10.5 billion reported in April, according to the CML. Furthermore, May’s figure is 70% lower than the peak of summer 2007.