August sees house price plateau and ushers in buyerâ€™s market, says Hometrack
04 September 2014
House prices have risen by just 0.1% for the second month in a row, as the gap between supply and demand continues to narrow, according to the August National Housing Survey carried out by Hometrack.
Hometrack points to a weaker demand and vendors having to accept larger asking price discounts contributing towards a shift into a buyer’s market for the remainder of 2014.
According to the survey, the change of fortunes for the London market over the last six months has been stark. In February 87% of London postcode districts witnessed a price increase over the month, compared to just 11% now. The proportion of the asking price achieved has fallen from 98.8% to 96.4%.
Commenting on the trends in the market, Richard Donnell, Director of Research at Hometrack, said: “The latest survey continues to point to clear evidence of slowdown, particularly in the London market. This is not a huge surprise for August but the signs of a slowdown in market activity were starting to emerge back in May with evidence of growing resistance to rapid price rises in the London market. Talk of a housing bubble and warning from the Bank of England have impacted sentiment while tougher affordability checks for mortgages and rumblings around interest rate rises is starting to make buyers think twice.”
“Important lead indicators in this survey are turning and pointing to a loss of momentum in house price growth. In particular a widening gap between asking and achieved prices in the face of weaker demand and an increase in the time on the market. Both indicators are coming off a positive base which suggest a slowdown in the rate of growth rather than price falls. We expect a continued shift towards a seller’s market in the face of weaker, more price sensitive demand,” he added.