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Rightmove, the UK property website, has indicated that asking prices for residential property may have not only stopped increasing, but appear to have decreased.
The website has shown that property prices fell in August by 2.9% compared with last month. The prices are, as has been the case for some time, heavily influenced by London, where interest rates hikes would have a significant impact given the price of houses and related high mortgages.
It is thought that potential interest rate increases are one reason for the downturn in asking prices. The trend will also influence the annual statistics, at this stage bringing the annual increase down from 6.5% in July to 5.3% in August.
The survey shows that asking prices in the capital have fallen for the third month in a row, and by much as 6% between July and August. While it is true that this time of year can be a quiet one in the residential property market, with school holidays and holidays abroad interfering with house purchases, this decrease is larger than one would expect.
Rightmove has also pointed to an increase in supply being part of the reason for the increase. As a result of the seemingly ever-increasing asking prices, more and more people (in fact, a 20% increase) have been putting their properties on the market, leading to more supply, and potentially reducing the prices across the board.
It is likely that interest rate rises will impact upon home owners across the country when they do eventually increase from the all-time low, which has now been in place for five years. For many people – including all recent first time buyers, this level of interest rate will be all they will have known, and increases may be hard to deal with, especially with the news that salaries are not yet in line with inflation.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.
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