London home sellers cut prices by a record for the month of July as an increase in supply added to pressure on the property market during the traditional summer lull, Rightmove Plc (RMV) said.
As Britain’s housing market struggles to recover, the Bank of England last week announced details of its new lending program aimed at boosting credit to the economy. Photographer: Chris Ratcliffe/Bloomberg
Asking prices dropped 3.6 percent from June to an average 460,304 pounds ($715,600), the operator of Britain’s biggest property website said in an e-mailed report today. Across England and Wales, values fell 1.7 percent to 242,097 pounds.
Property demand weakened in July as bad weather curbed viewings and the London Olympics added to “distractions,” according to Rightmove. As Britain’s housing market struggles to recover, the Bank of England last week announced details of its new lending program aimed at boosting credit to the economy.
The drop in London follows “several months of fairly heady price increases,” said Miles Shipside, commercial director of Rightmove. “It might just be that the market is finding a price level where buyers and sellers are willing to transact.”
In a separate report today, the Ernst & Young Item Club said that house prices will fall 2 percent this year, leaving them 8 percent below the 2008 peak in nominal terms, and down 24 percent in real terms. The group, which produces forecasts from a model similar to that of the U.K. Treasury, cut its forecast for gross domestic product and predicted no growth this year.
London Falling
In London, part of the price decline may have reflected a tax increase on properties costing at least 2 million pounds, announced by the government in March, Rightmove said. Values in Kensington and Chelsea, the capital’s most expensive district, fell 5.1 percent in July to 2.03 million pounds.
The number of new sellers rose 6 percent in July from June, Rightmove said. The biggest decline in asking prices was recorded in Brent, down 8.9 percent, followed by Kingston-upon- Thames, down 5.8 percent. Hackney and Greenwich were the only districts to record increases. Values in London were up 6.4 percent in July from a year earlier.
“This increase in seller numbers is unusual at this time of year when there is traditionally less buyer activity, and is made even more surprising given the proximity to Olympic distractions and upheaval,” Shipside said.
Nationally, growth in property supply outpaced demand by a ratio of 2:1 due to “miserable” viewing weather, Rightmove said. The Met Office said Britain suffered the wettest June for over a century “followed up by a very wet start to July.”
Of the 10 regions tracked by Rightmove, only one, the West Midlands, recorded a monthly increase in prices in July. Average house values rose 2.3 percent from a year earlier.
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