Average property asking prices fell by a staggering 6% in November as sellers struggle to get interest in their properties as buyer numbers fall due to continued hihjer interest rates making mortgages less affordable for prospective buyers. In addition property sale completion are down 10% compared to the same period in November 2019, just before the start of the pandemic.
Average asking prices for the year have fallen by 1.3% pa, but this is perhaps now the start of the long expected property price correction. A 6% fall in a month is huge but we have seen this before with prices falling 8% in a month in 2018 when the impact of Brexit, tax changes to landlords offsetting finance costs and the removal of zero stamp duty for 1st time buyers hit. Overall though in 2018, property prices did increase over the year.
Many commentators have been forceasting property prices to fall by 8-15% in the coming year and we believe now is the start of those falls. That said, the Chancellor’s Autumn statement is next week on Wednesday 22nd and there may be some give aways to help the beleagured property market.
Never forget, property is a big earner for the government with ‘help to buy’ equity loan proportional repayments, stamp duty, inheritarnce taxes and of course landlord rental income taxes, so we always expect governments to stimulate property market as well as the feelgood factor for people have equity/wealth in the home when property prices increase.