Drop in asking prices on properties
October 15, 2007
A recent report has shown that there was a reduction in the asking prices on properties in the UK in August, even though the actual value of the properties had not dropped.
According to recent figures there was a 2.6% drop in asking prices on properties in August, equating to around £6200 on the average property price. Industry experts are stating that the drop in asking prices is the result of the controversial Home Information Packs as well as low levels of consumer confidence in the housing market.
Home Information Packs, or HIPs, have been partly blamed for the drop in asking prices. One industry official stated: “Whilst there was a surge of four bedders coming onto the market for just one week at the end of July, there has been a much greater dearth of them in the four weeks since. If this happens with the remainder of the phased introduction of Hips, the concern will be that impulse sellers are being put off by the additional costs and hassle of a pack. Whilst it should all settle down with time, it will take longer as sellers are now facing the challenges of a cooling market and the highest interest rates for six years.’
There are other factors that have been blamed for the reduction in asking prices, including the recent problems experienced within the mortgage and financial markets. According to Right Move property prices in England and Wales fell to an average of £235,000 in August.
This has affected the annual house price inflation figures, which have now fallen from 12.8% to 9.6%. Consumer confidence and affordability have been knocked by increased interest rates and the need for larger mortgage loans, amongst other factors.
Alan Wright
15th October 2007
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