RTTNews - House prices in the UK dropped in June, after rising consecutively in the preceding four months, a report from the property website Rightmove showed Monday.
The average asking price of property slipped 0.4% month-on-month in June, after rising 2.4% in May. The average asking prices declined to GBP 226,436 from GBP 227,441 in the preceding month. Despite the fall in June, the asking prices have increased 6% since January, the Rightmove said.
Year-on-year, house prices slipped 5.5% in June from a 6.2% drop in May.
The hesitation in asking prices after four consecutive monthly rises appears to highlight that, while new stock remains in short supply, new sellers are having to vary their prices to match local buyer demand, Rightmove said.
It's a mistake to confuse the upturn in enquiries and sales with a return to a more normal market. While conditions are much improved on the darkest days of last year, we are now starting to see some big distortions and wild swings due to the combined effects of recession and restricted mortgage availability, Miles Shipside, the commercial director of Rightmove noted.
The property website pointed out that as the best deals on properties and mortgages were available only for the equity-rich, there was a need to match new stocks which dealers were planning to attract with want buyers want to buy and can afford.
The report said due to limited funds available, rationing of mortgages by raising interest rates and requiring large deposits is likely, as the demand rises with the increase in number of sales.
Property deals appear within the grasp of cash strapped first time buyers, but every rise in fixed rates frustratingly nudges them a bit further out of reach. Lenders need to be wary not to choke off the recovery in affordability and activity by punishing the returning buyers with ever widening margins, the report said.
Moreover, the Rightmove indicated that unless the markets for wholesale mortgage funding reopen, volumes would remain low due to a distorted reliance on equity-rich buyers.
Meanwhile, the latest report from Halifax showed that house prices were up 2.6% month-on-month in May, while the Nationwide Building Society reported a 1.2% increase in house prices for the month.
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