Sellers Dropping Prices as Extra Homes Flood the Property Market says Moneystand

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New research has indicated that new sellers cut their asking prices for the first time this year during July as properties continued to flood the market.

Property website Rightmove have said the average asking price for a home in England and Wales fell by 0.6% to £236,332 during the four weeks leading up to July 10.

According to Rightmove, an average of 30,000 new homes are currently being put forward for sale each week, which is a 45% increase year-on-year.

The average number of properties that estate agents have available also rose for the fifth consecutive month, reaching 77, which is the highest level there has been since August 2008. This equates to five properties on the market for every two potential buyers who have an approved mortgage.

The estate agent warned conditions were rapidly changing to become a buyers’ market and it expected house prices to lose all of the gains they had made so far in 2010 during the second half of the year.

Matt Spencer of finance site Moneystand.co.uk, said: “The amount of new mortgages being approved each month is less than half the number of new sellers. The stark imbalance is being exacerbated by the increase of nearly 50 per cent in the number of properties coming onto the market compared to a year ago.
“With more aggressive pricing seemingly the current trend, conditions look set for a strong buyers market for the second half of 2010. We could then see the average of 7 per cent price gains of the first-half of 2010 eradicated by the end of the year.”

The set of figures are the latest in a succession of dreary data on the conditions of the housing market, with Halifax also informing that prices fell for the third straight month throughout June.
Spencer continued: “The overall picture is that the property market recovery is stalling and there has been reporting that while average property values inched up by 0.1%, house prices are only rising in 11% of postcodes, which is down 25% four months ago.”

“The only glimmer of light is for those with a mortgage rate for those with a 25% deposit look good, while rates for those with 15% and 10% deposits are getting better.”

Personal finance blog MoneyStand provides unbiased personal finance, IVA and debt related information. Founded in 2008, MoneyStand was created in response to the worsening financial situation of individuals in the UK and across the world. For more information on personal finance, visit http://www.moneystand.co.uk.

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