House price gains to be wiped out

House price gains made in the first half of 2010 are set to be wiped out, due to aggressive pricing and a flood of new sellers coming to market, Rightmove warns.

It reveals new-to-market sellers reduced their asking prices for the first time this year by 0.6% in July, with the national average asking price now at £236,332.

With the first month-on-month fall in asking prices, Rightmove predicts further pressure on new sellers’ asking prices will see the 7% increase for the first six months of 2010 disappear. National averages will also fall by a similar amount.

Miles Shipside, commercial director of Rightmove, says: “More aggressive pricing is now the order of the day, which means that conditions are ripe for a strong buyers’ market in the second half of 2010. This is likely to see the average price gains of 7% for the first half of the year wiped out by year-end, in line with our original forecast for the year of no net change in prices.”

New seller numbers are outstripping mortgage approvals by five to two, with 30,000 properties coming to market each week, up 45% on July last year, compared to 11,000 mortgage approvals a week.

The number of unsold homes per agent has increased almost 25% in the first half of 2010, and estate agents now report the highest stock levels since August 2008.

Shipside adds: “Sellers are going to have to price at bargain levels and bullishly promote their properties in order to stand out from the crowd. Those that act quickly will be able to lock-in some of the price gains made in the last 18 months.”