It is the smallest drop in new seller asking prices during the seasonal November slowdown since 2011, according to the Rightmove report and the online portal says that it is indicative of even higher prices next year.
Prices fell in all regions with Wales seeing the biggest monthly fall of 3.7%, taking the average asking price to £196,471 and both the South West and the North East saw a fall of 2.3% taking the averages to £279,643 and £142,917 respectively.
Yorkshire and Humber saw a monthly fall of 2.2% to an average of £167,343, in the North West there was a fall of 1.9% to £171,709, while the South East and the West Midlands recorded a decline of 1.1% to £384,001 and £196,471 respectively.
There was a 1.6% fall in asking prices in Greater London taking the average to £619,866, a fall of 0.6% in the East Midlands to £187,148 and a decline of 0.3% in the East of England to £315,568.
The report points out that sellers who come to market in the run-up to Christmas typically set lower asking prices as buyers are harder to attract at this time of year. However, this November’s price dip of 1.3% or £3,977 is much less marked than usual, and is the smallest seen at this time of year since 2011.
According to Rightmove director and housing market analyst Miles Shipside this indicates a positive underlying outlook for the year ahead among home owners, with research by Rightmove showing them to be in a confident mood and largely unfazed by the risk of higher interest rates in 2016.
Given these findings, and the likelihood that demand will continue to outstrip supply, prices look set to increase again in many locations in 2016. Shipside expects it to be a short lived dip in asking prices.
High home owner confidence is demonstrated by Rightmove research, with a sample size of over 23,000, which reveals that the majority, 85%, don’t think their financial situation will worsen in the next year. Despite the possibility of a 2016 rate rise that could increase mortgage repayments for many, 41% of home owners said they thought their household’s financial situation would get better over the next 12 months.
Another 44% said things would stay the same, with only 15% forecasting they would get worse. Some 69% were also of the opinion that property would continue to rise in price over the next 12 months, with only 7% expecting prices to be lower.
‘Home owners have had a smooth ride over the past six or so years with a 0.5% base rate, so you would think that more might have concerns about the extra drain on their financial resources when the base rate inevitably goes up. Whether in 2016 or early 2017, a rise won’t come as a surprise as an increase has been well trailed,’ said Shipside.
‘Indeed, competitiveness among lenders means some of the possible effects of rate rises for both home owners and movers will be softened, and buyers’ ability to afford higher interest rates is already built into the current tighter lending criteria. Many recent buyers will also be shielded as they are locked into fixed rates, so the shock of the first rise for over six years will be a delayed one,’ he pointed out.
Shipside also said that the positive home owner outlook will be influenced by the prospect of real wage growth out-stripping consumer price inflation (CPI) and aiding stretched buyer affordability. In addition, low borrowing costs and reduced stamp duty enable some potential owner-occupiers to pay more, which further contributes to higher prices.
‘Long term low interest rates are typically a trigger for activity and price rises in the property market while other parts of the economy are less susceptible to such an incentive. The spur of cheap money if you’ve got your credit rating in good order helps buyers to pay the asking price or outbid the competition for their ideal home. It all fuels demand for property,’ Shipside explained.
