First fall in average house prices this year
By Richard Wright | 16th August 2021
Property prices fell slightly for the first time this year. The latest survey from website Rightmove shows that the average price of homes was down by 0.3% in August.
The fall was the result of a cooling of the upper end of the market which was driven to a frenzy by the government's Covid stamp duty holiday.
But one Gloucester estate agent says it's a lull before a second wave of busy house market activity.
Anthony Stick, of Belvoir estate agents in Gloucester, said: "There's bound to be a little pause but, as things get back to normal, people are generally feeling a lot more confident.
"I expect to see a second wave of house buying start in October and pick up again in February next year. Brexit and Covid have produced a huge pent-up demand in the market.
"The scale of rise that we've seen has been unsustainable and I now expect to see a levelling off of prices."
The Rightmove survey showed new record highs in the price of property coming to market in the mass-market sectors, made up of first-time buyer properties, up by £1,328 (+0.6%) in the month, and second-stepper properties, up by £975 (+0.3%) in the month.
A cooling of the upper-end four-bedroom-plus sector, down by £4,699 (-0.8%) in the month, with buyers no longer making larger stamp duty savings, meant the national average fell by £1,076 (-0.3%) this month, the first price drop recorded in 2021.
But the property website said buyer demand remains strong, suggesting an autumn bounce in prices and seller activity. With homes selling faster than ever, there was a strong incentive for owners to come to market with "sell before you buy" proving the best tactic for many to secure their next home in this fast-moving market.
Tim Bannister, Rightmove's Director of Property Data, said: "New sellers dropping their asking prices can ring economy alarm bells, especially when it's the first time so far this year, so it's important to dig underneath the headline figures.
"Firstly, we are in the holiday season which means that sellers have traditionally tempted distracted buyers with lower prices, though that might well be less applicable this year with many buyers having to stay a lot closer to home.
"Indeed, our analysis shows that average prices have only fallen in the upper-end sector, which is usually more affected by seasonal factors such as the summer holidays and has also seen the greatest withdrawal of stamp duty incentives.
"The mass-market of properties that cater for first-time buyers and second-steppers is still seeing high demand and upwards price pressure leading to new record high average prices in those sectors."
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