Norfolks online estate agents. Est. 2007

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23 January 2008

The third consecutive monthly drop in UK house prices is beginning to coax some buyers and bargain hunters alike back to the housing market, property website Rightmove said today.

The website, which advertises property online for around 90pc of the UK's estate agents, said average prices in January dipped 0.8pc, following December's drop of 3.2pc.

In a further blow for sellers, Rightmove reported that this month's decrease has pulled the annual rate of growth down from 4.8pc to 3.4pc - the lowest year-on-year figure for two years, mirroring the 2005 property market downturn.

However, the group said the continued fall in prices had encouraged buyer activity, with clear evidence of a marked increase in activity immediately after the New Year.

Miles Shipside, commercial director at Rightmove, said: "Some homebuyers are now able to find properties that have fallen into their affordability zone, and are bagging what they see as bargains against previous prices.

"Some properties have had their prices dropped by 10pc or more and are now within reach, satisfying some of the pent-up demand from previously disenfranchised buyers."

Buyers have a wider choice too, with the number of property on estate agents' books up by 20pc compared with this time last year.

Meanwhile, the average time on the market - which peaked at a record high of 98 days in December - fell back to 95 days in January.

Mr Shipside said: "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.

"Some sellers will no doubt be tempted to test the market a higher price with the onset of spring, so now is a good time for bargain hunters to press those committed winter sellers for a deal."

Rightmove noted that more than 28,000 properties came onto the market in the first full week of January, and estimated that December's price fall was encouraged by those rushing to beat the HIP deadline.

The group said: "The final HIPs deadline for two or fewer bedroom properties boosting listings in mid-December. This HIP avoiding surge exacerbated the price fall by around 0.7pc as they tended to be cheaper-than-average properties making up a greater proportion of the new listing mix."

Average house prices now stand at £230,428 across the UK, down £1,968 over January.

Rightmove reported that London property however, enjoyed a further rise of 3.6pc during the first month of the 2008, with Hammersmith and Fulham, and Hounslow, the only boroughs recording a fall.

The property website confirmed its forecast for the year of flat prices, but said affordability should continue to improve as average wages rise and interest rates fall.


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