New seller asking prices for the North have dropped 0.8% month-on-month, according to Rightmove’s House Price Index for June.
Following substantial increases in the price of property coming to market of the first five months of 2014, the research shows a marked change for the UK as a whole, with average price rises of only 0.1%,
And while it is typical that demand cools over the summer months, the marginal increase is well below June’s 0.6% average increase over the last 10 years.
May v June housing market
North East house average asking price (June 2014)
North East house average asking price May 2014)
More regions, in fact, saw falls than rises this month - although the only area in the south to be affected as such was London, where a 5% drop in prices was recorded.
Although all regions have seen an increase in supply as more people to decide to sell, the capital has seen a rush of new sellers.
With the ebb in demand and the flow of extra property choice for buyers coinciding in what Rightmove says was a “somewhat chaotic implementation” of the new Mortgage Market Review’s (MMR) tighter lending criteria, some momentum had been taken out of the market.
Miles Shipside, Rightmove director and housing market analyst, said: “The London market powers the rest of the UK but is starting to run out of steam.
“While the legacy of rises in central London continues to ripple out to its better-value commuter-belt, fuelling price increases in all southern regions, London itself is now marking time.
“It’s an example to the rest of the country of what happens when affordability and common sense get stretched too far.
“Through luck or judgement it appears that the timing of the Mortgage Market Review, more property for sale in all regions, and a tail-off in pent-up buyer demand are alleviating some of the upwards price pressure.
“This will come as a relief to the Governor of the Bank of England and the Financial Policy Committee, who have cited an over-heating housing market as a serious threat to economic recovery and have further powers to use should it get out of hand.”
Ajay Jagota, managing director of South Shields-based lettings agency KIS Lettings, said: “While there has been a decrease in prices, we certainly have seen a rise in activity in the North East.
“There are more buyers in the market, but I don’t think the situation in the North East has been helped by the Mortgage Market Review.
“I wouldn’t say it’s put the brakes on things, but there’s certainly been a drop down in gears, with the banks not being prepared and lots of toing and froing between financial advisers.
“I would hope that that would change in the next couple of months.”
KIS has traditionally focussed on the rental sector, within which it works with around 700 landlords in South and North Tyneside.
The company, however, has also moved into the sales market in recent months.
“From a lettings point of view, we have seen tremendous activity in the last three or four weeks - perhaps since the half-term break,” Jagota added.
“There has been an unprecedented volume as far as lets are concerned, with a lot more so-called ‘accidental landlords’.”
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