The market stagnates due to a battle of wills between ambitious sellers, and buyers haggling harder
However, the gulf in activity between the North and South continues, with topline figures masking the complexity of what’s really happening on a regional basis.
According to the report, the average asking price has now hit £309,439 which is a marginal increase of 0.4 per cent on May’s figure of £308,075 and up by 1.7 per cent on May 2017 and is the third consecutive month that asking prices have increased.
The numbers of sales agreed over the last month appear to be healthy as well, and whilst 2 per cent lower than May 2017, they are higher than the same period in 2016 by 5.4 percent, which is a notable increase.
But whilst these overall figures appear relatively benign, they conceal a far more complex picture of regionally diverging prices and activity levels, as the north continues to perform exceptionally well, whilst London and the south are still lagging behind as the market stagnates due to a battle of wills between ambitious sellers, and buyers haggling harder.
In the last month, the better performing areas of the country, such as Scotland, Wales, the North West and Yorks and Humber, have seen falling levels of available properties on the market as buyers snap up homes, sometimes before they even hit the open market. As a result of lack of available properties, prices are still climbing, setting new records.
However, in the Capital and the commuter belt of the South East, there are now more homes coming to the market, with an average increase in stocks on estate agents books up by 17.5 per cent compared to the same time last year, which is now causing sold prices in many areas to drop.
Miles Shipside, Rightmove director and housing market analyst said: “The national average new seller asking price continues to creep upwards. The reduction in property choice for buyers in the north compared to a year ago is a result of property for sale being snapped up, meaning it’s more of a sellers’ market there.
“In marked contrast the jump in buyer choice in all southern regions shows there are signs of a buyers’ market in some areas.
“With the year at mid-point the 2018 summary so far is that the chances of sellers finding a buyer in the northern regions seem to have held up very well against the previous year, but market conditions are clearly more challenging for sellers in much of the south.”
James Cameron, director of online agency Vesper Homes says of the diverging picture: “Housing stock in the north of England, in areas such as Manchester, is low, and we are seeing a lot of interest in property as soon as it hits the market.
“Many properties receive offers on open house day, for example. In London it’s a different story. The downwards price reductions keep on coming, particularly on new builds as there is oversupply combined with lack of confidence from investors who can see agents reducing prices every week, which doesn’t inspire confidence.
“However, first time buyer purchases of older properties costing less than £500,000 still remains strong.”
Brian Murphy, Head of Lending for Mortgage Advice Bureau concurs: “What’s interesting is that whilst in the north, regions such as Yorks and Humber, Scotland and the North West are seeing the number of properties on the market dwindle, which easily explains why asking prices are rising, this pattern isn’t repeating itself in the South.
“For example, in London, the South East and South West, where stock numbers have increased significantly, one would expect asking prices to correspondingly cool, but that doesn’t appear to be the case currently.
“As one would assume, the Rightmove report goes on to suggest that there is a disparity in these areas between seller and buyer expectations, which is likely to be part of the reason we’re seeing the market stagnate in these areas.”
The value of a property is only what someone is prepared to pay for it
Equal caution may be advisable in areas where there is a current stock shortage
Brian added: “On the surface, the data suggests that, ongoing political and economic uncertainties aside, we appear to be in a fairly resilient environment, albeit that for those who are in one of the areas where more stock is now hitting the market, serious sellers who want to secure a buyer within a reasonable amount of time may need to perhaps consider a less ambitious asking price.
“Equal caution may be advisable in areas where there is a current stock shortage, leading to significant price increases, as this can create issues in terms of mortgage down-valuations.”
Going into the summer months, the key message to those who are either already marketing their property or considering doing so is to approach with a healthy dose of realism.
Whilst it may be tempting to try for an ambitious asking price, at the end of the day it must be remembered that buyer affordability is for the most part stretched to the limit, particularly if a mortgage is needed to fund the purchase.
The days of being able to go back to one’s lender to squeeze a slightly higher level of borrowing is now in the past, due to far tighter lending criteria.
As we head into the summer market, more so now than ever it’s worth bearing the old adage in mind; the value of a property is only what someone is prepared to pay for it.
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