A marked fall in asking prices in December could signal a continued revival in the housing market, according to Rightmove.
The online estate agent reported sellers in London dropped their asking prices by 4pc this month, with the national average coming in slightly lower at 3.3pc. The fall is the largest in over five years in London. The reductions only partly offset an annual increase in asking prices of 6.8pc in London and 1.4pc nationally.
Miles Shipside, housing market analyst at Rightmove said: “December is the most likely month for sellers coming to market to get very real about the price they ask for their home. This year they’ve gone a bit further than ever before, though in truth it is symptomatic of the 'all or nothing’ pattern of 2012.”
“Many who put their property up for sale this close to the festive season will have a very good and pressing reason to sell, so Christmas will have come early for those buyers who have been able to bag a bargain.”
The reductions across London, where average asking prices have now reached £483,709, could signal a “less frothy” 2013. The capital has been the one area in the country where the housing market has proved resilient to the wider economic problems. Much of the investment has come from overseas buyers looking for a safe haven for their cash.
Investment into London prompted Mr Shipside to describe the market as a “bubble”.
However across the country there has been a shortage of sellers, leading to lower transaction volumes than recent years and support for average prices.
A busy summer of sporting and Royal events also led to a slowdown in transactions as house buyers and sellers were distracted.
Mr Shipside said: “This summer also saw big falls with the distractions of the Jubilee and the Olympics, though prices did rebound in October. It seems that sellers who come to market at times when they know that buyers’ attention is focused on other events realise that their prices have to be extra keen in order to compete.”
Looking into next year Mr Shipside predicted that an increase in mortgage lending coupled to a rise in homeowners with a “five-year itch” to sell.