Number of homes put on market rises 8.6% but there has been no increase in buyers

A surge in homeowners putting their property on the market – just as buyers melt away in summer – is depressing house prices, according to the biggest property website, Rightmove.

The number of properties coming on to the market in July rose by 8.6% but there has been “no corresponding increase in buyer numbers to soak up the new seller influx”, Rightmove said.

Annual price growth slowed to 1.4% in July, down from 1.7% the previous month.

After a long period in which estate agents decried the lack of properties on the market, they have more on their books than at any time since September 2015. As a result, sellers are having to cut overly optimistic asking prices to find buyers.

Rightmove said: “The proportion of sellers already on the market that are reducing their asking prices is the highest at this time of the year since 2011, indicating initial over-optimism on price.”

Behind the national figures lies huge regional variations, with the West Midlands and Scotland showing strong price growth and busy sales activity, while London, the south-east and east of England are recording flat or falling prices.

Rightmove only records asking prices, which tends to give an inflated picture of prices, compared to the final agreed price logged at the Land Registry but has the advantage of being the most immediate and up-to-date barometer of activity.

It found that in Scotland, asking prices are up 8.5% over the past year, rising 1.5% in July alone, with properties taking an average of just 39 days to sell. In the West Midlands, prices are up 5.6% over the year and homes take 46 days to sell.

The contrast with London’s depressed market is startling. In the capital, asking prices are down by 1.7% over the year and fell another 0.5% in July alone. Meanwhile, it takes 67 days for a home to sell in London, a month longer than it takes in Scotland.

But there remains a huge gulf in prices between regional markets. The average London asking price is £628,458, nearly three times the £227,804 average in the Midlands and four times the £158,864 average in Scotland.

Within the capital, the central zone 1 area is recording the biggest price falls, down 6.5% over the year and 1.2% on the month. London’s zone 2, which is traditionally a more national than international market, is also reporting big price decreases, with the average property down nearly £8,000 in July alone to £752,675.

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But separate data from estate agency group Your Move, also released on Monday , suggests that the decreases in London may be abating. Its data showed that prices rose 0.2% in the capital in June, led by a recovery in the super-prime areas such as Kensington and Chelsea.

Estate agents blame the uncertainty around Brexit for hitting confidence. Nick Leeming, the chairman of agency Jackson-Stops, said: Whilst it is the norm to see more sellers coming on to the market at this time of year, there has undeniably been a stronger bounce in May and June this year as many homeowners held off listing their properties due to the unseasonably cold weather in March and April.

“An increase in the number of properties for sale will have to be matched by a corresponding increase in buyer demand if vendors are to avoid reducing guide prices to secure a sale. The market is finely balanced at the moment and the latest political uncertainties over Brexit will do little to help build confidence.”

Source: The Guardian