House price growth has slowed to its lowest annual rate in four years due to the rising cost of living, tighter lending criteria and Brexit uncertainty. According to property website Rightmove, the annual rate of house price growth was 2.3% – the lowest since April 2013. The price of property coming to market went up […]
House price growth has slowed to its lowest annual rate in four years due to the rising cost of living, tighter lending criteria and Brexit uncertainty.
According to property website Rightmove, the annual rate of house price growth was 2.3% – the lowest since April 2013.
The price of property coming to market went up 2.0% in February to £306,231, the smallest price rise at this time of year since 2009.
Miles Shipside, Rightmove director and housing market analyst, warned sellers against overpricing their properties in the current market.
“We’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty.
“The housing market has had a long sprint since April 2013 when the annual rate was last below this level, so it’s not surprising that upwards price pressure is running on tired legs with average prices today being 23% or nearly £60,000 higher than they were then.”
Rightmove said that early 2016 was boosted by “frenzied” buy-to-let investors rushing to beat the April stamp duty deadline, which made this year look subdued by comparison.
Despite this, Rightmove said that demand remained strong, with 131 million visits to its website in January – 3% higher than a year ago.
The slower pace of price rises means that over-priced properties are at greater risk of standing out as poorer value for longer, diminishing the interest of potential buyers.
With buyer affordability increasingly stretched, only one in four agents questioned in a survey by Rightmove said there was still interest if prices were more than 5% too high.
In addition, Rightmove analysis of over 100,000 newly-listed properties showed that sellers are 40% more likely to sell with that agent if the property is priced right when they first come to market.
Kevin Shaw, national sales director at estate agency Leaders, said: “Tempting as it may be, it’s never in the interests of a seller to set an asking price above what a property is really worth. Setting an accurate price, based on local market conditions, is crucial for achieving both a quick sale and the best possible price.
“Overpricing, particularly in a price-sensitive market, will result in the property sitting on the market until the price is dropped, losing the interest of buyers and ultimately achieving a lower price in the end.”
James Sims, director at Brik Estate Agents in Fulham, said: “The sales market in Fulham is currently very price sensitive. We’re noticing that reducing properties by even a marginal 2-3% can make a significant difference to the level of interest from potential buyers. As is usual at this time of year we’ve had more sellers of properties in higher priced brackets come to market, and so we’ve been working with them to make sure their property is marketed at the right price.”
