House Prices Set to Fall as Austerity Measures Start to Bite

By Rightmove Group Ltd, PRNE
Sunday, June 20, 2010

LONDON, June 21, 2010 - The Rightmove House Price Index, the UK's leading indicator of house
prices (, recorded that the
average asking price for a property in the UK edged up by just GBP633 in June
to GBP237,767.

New sellers' asking prices give an early indicator of the mood and future
direction of the housing market. While sellers have increased their price
aspirations for six months in a row, the pace is now slackening with a rise
of just 0.3% this month, compared to 2.6% and 0.7% in April and May. The new
government's initiatives, including the suspension of Home Information Packs
(HIPs), reductions in public spending and rumoured increases in Capital Gains
Tax (CGT), are having an immediate effect on the housing market. We are now
seeing more competition among sellers and a slowdown in the number of buyers
as the market begins to turn.

Miles Shipside, commercial director of Rightmove, comments: "They say
that troubles come in threes. The continuing mortgage famine has now been
joined by a surge in sellers following the abolition of HIPs and investor
reticence driven by rumours of CGT increases. Together, these factors are
likely to put an end to this year's recovery in house prices. It is an
unfortunate concatenation of events that disrupts what was sort of passing as
normal service, where investor appetite provided an uneasy balance to the
first-time-buyer-starved market. A surge of HIP-free properties has come to
the market, and mortgage-reliant buyers and wary investors are failing to
match the increased supply."

Having seen average asking prices rise for ten out of the last 14 months,
and a 7.4% increase in the first six months of 2010, we forecast that new
seller prices will fall during the second half of 2010 to give an overall
price standstill for the year. This month Rightmove has recorded a 22%
increase in the weekly run-rate of new sellers coming to market, up from
27,235 in May to 33,149. New listings are now up 56% nationally compared to
June 2009, with property for sale in London
( seeing the most
dramatic rise in fresh stock at 88%. We believe this surge will tail off to a
degree, but higher seller numbers and increased competition are new factors
that those who are serious about selling will have to consider when setting
their prices.

For further statistics and to download the Rightmove June 2010House Price
Index please visit -
search for local house prices at


    Tom McGuigan
    Rightmove Press Office

Tom McGuigan, Rightmove Press Office, press at, +44(0)207-087-0700

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