The average price of a home coming up for sale in Britain’s richest borough has dropped by almost £100,000 in a month as fierce competition among sellers in many areas prompts some to slash their price expectations, data shows. The property website Rightmove said that for Britain as a whole, average newly listed asking prices for homes had fallen by 2% over the past month, the largest August price drop in eight years. Separate data shows that buy-to-let investors are cashing in on the cooling housing market by forcing more sellers to accept lowball offers as some struggle to drum up interest in their properties.
In recent days, a series of surveys have pointed to a weak or cooling market. On Thursday, the Royal Institution of Chartered Surveyors (Rics) said the UK housing market “remained subdued” in July. According to the lender Lloyds, UK house prices were broadly stagnant last month as prospective buyers were squeezed by higher mortgage rates, economic pressure caused by conflict in the Middle East, and stretched affordability.
The rival lender Nationwide said prices rose by only 0.1% last month. Rightmove said the national average figure – which equates to a £7,360 reduction in the average newly listed asking price – masked an increasingly divided regional picture. It said London had seen the biggest drop over the past month, of 4.4%, equating to almost £30,000 lopped off a new asking price.
The site’s data suggests that in some London boroughs, sellers are resorting to drastic action to try to tempt affordability-stretched buyers and get their sale over the line amid the distractions of summer holidays and heatwaves. Rightmove put the current average new asking price of a home in the Royal Borough of Kensington and Chelsea at £1,552,970. A month ago, the figure was £1,648,148, a difference of just over £95,000.
The property website said the number of available homes for sale in London was the highest it had been for 16 years, “leading to fierce competition among sellers to tempt buyers in the costliest part of Great Britain”. Colleen Babcock, a property expert at Rightmove, said: “This month’s larger-than-usual August price drop is a sign that many sellers are recognising the reality of the market and pricing much more competitively from day one.” Separate data issued by the estate agent Hamptons illustrates how investor buyers can find themselves in a stronger position when the housing market is weaker and some sellers are struggling to generate interest. Hamptons said these landlord purchasers were capitalising on the conditions to “drive a hard bargain” and push for steep price reductions, and it added that sellers were increasingly willing to accept these lower offers.
In July, according to Hamptons, landlords accounted for 14.1% of all home purchases in Great Britain, up from the 12.4% year-to-date average. At the same time, they became more ambitious with their offers: the average landlord buyer paid just 88.7% of the initial asking price in July. In fact, more than half (56%) of offers from investor buyers during July were at least 10% below the seller’s initial asking price, the highest figure since April 2020, a few weeks into the first Covid lockdown.
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