Fourth property index in a row shows UK real estate recovery is at an end

Property website Rightmove found sellers slashed prices by 1.7% during the month to August 7, sending the average asking price down by £4,091 to £232,241.
 
Soaring numbers of sellers outnumbered buyers, with the imbalance in supply and demand compounded as many house hunters took summer holidays, it said.
 
In London home sellers cut £17,000 pounds off their asking prices on average in August, wiping out gains recorded in the first half of the year, the report shows. Asking prices in the capital fell 4.1% on the month to an average of £405,058 pounds, the biggest drop in two years and returns values to levels last seen in January
 
The West Midlands saw the biggest fall in asking prices, down 4.4%,  while prices rose in the North and East Midlands, by 2.6% and 1.5% respectively.
 
Rightmove found available stock per agent rose to its highest August level for three years, up 41.3% on a year earlier to 29,220 a week. It warned market conditions ‘bear some similarities’ to the torrid second half of 2008 when the credit crunch left prices plunging by 7.1% as agents struggled to shift stock.
 
The news will add to fears of a relapse in the housing market, coming after the Royal Institution of Chartered Surveyors recently said its members reported falling prices for the first time in a year last month and recent reports from the Nationwide Building Society and Halifax also signal that the UK’s housing recovery is faltering
 
Rightmove stressed August was one of two months in the year that traditionally see price falls due to the holiday season, while figures showed values were still higher year-on-year, up 4.3%. But the latest monthly fall in prices follows a 0.6% drop in July and marks the biggest slide so far this year.
 
Ongoing restrictions in the mortgage market are hampering buyers, Rightmove added, causing pent-up demand. But it also said that while numbers of buyers are dwindling, it saw an all time high of daily activity on the website earlier this month.
 
‘There needs to be a spur to cause prices to rise. However, as mortgages won’t become available to the masses and last year’s stock shortages show no sign of reappearing, we can’t see it happening during the remainder of 2010,’ said Miles Shipside, director of Rightmove.
 
‘Mortgage levels have a lender imposed ceiling. If you can’t raise a beefy deposit, cheaper property prices won’t help you much,’ he added.