Uncertainty sees UK house prices hit by biggest fall in six years

While it is expected that new seller asking prices do tend to fall at this time of year to attract buyers who are increasingly distracted by the run-up to Christmas, estate agents Rightmove, which compiled the figures, warned that the reversal marks the largest drop in the month of November since 2012.

In Scotland, average asking prices are down by 1.3 per cent month-on-month, now averaging £151,209, while in Wales they have fallen by 1.2 per cent, reaching £192,441 on average.

The backdrop of cooling markets in the south of England and in the upper price sectors, combined with the political uncertainty, has resulted in new sellers lowering their asking price aspirations earlier than usual, Rightmove said. Encouragingly, though, slightly more sales have been agreed than in the same period a year ago.

Miles Shipside, Rightmove director and housing market analyst, said: “New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual. Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism.

“This is a welcome effort by sellers to minimise the usual preChristmas market slowdown. Some new-to-the-market sellers and their agents have acted early to try to improve the buying mood and avoid the traditional “buyer humbug” dislike of Christmas housing activity.”

All UK regions have seen a monthly fall in the price of property coming to market, with most of the largest falls in the south.

After Yorkshire and the Humber, the second largest monthly faller is the South East with an average 2.1 per cent fall (-£8,647).

Some of the more expensive towns in the London commuter belt which had seen over 40 per cent price rises since 2011 unsurprisingly have significant price falls.

London new seller asking prices drop too by 1.7 per cent (-£10,793), though this is not unexpected since the capital generally sees greater seasonal price volatility than the rest of the country.

Mr Shipside noted: “Seven years ago price rises started rippling out from the capital into the commuter belt in the South East. That ripple effect has now been reversed, with some of the London market price re-adjustment reverberating out into the commuter belt.

“New sellers of property now coming to market in this region have belatedly lowered their price sights. Higher end former hot-spot towns are now among the biggest annual fallers with Rickmansworth (- 7.1 per cent), Esher (-6.4 per cent) and Gerrards Cross (-6.0 per cent) now cold spots following price rises of nearly 40 per cent over the seven preceding years.”

These factors have contributed to the first national year-on-year price fall since November 2011, with the price of newly-marketed property now 0.2 per cent (-£607) cheaper than 12 months ago. With the supply of new-build houses remaining tight, a low interest rate environment combined with near record employment, and average wage increases now rising faster than both CPI inflation and average property prices, the underlying fundamentals for a stable property market remain sound. Indeed the number of sales agreed by estate agents was up in October 2018 compared to October 2017, albeit by a modest 1 per cent.

Mr Shipside added: “While many thought that the down-to-the-wire Brexit deal uncertainty would hold people back from buying, more buyers have actually jumped in. Some buyers see this preChristmas price lull as a gift to their negotiations. It proves that people need to get on with their lives and will continue to buy homes if the underlying economic fundamentals remain strong.”