House Hunters Fail To Bag A Summer Bargain

Asking prices for UK houses only fell slightly in August according to Rightmove (LSE: RMV.L - news) as the market has its best August in 8 years.

The property website Rightmove has revealed that prices only fell 0.8% in August, far less than the normal decline for the month, meaning that many would be bargain hunters have failed to bag a bargain this summer.

It (Other OTC: ITGL - news) is the strongest price performance for the month of August since 2007, when there was a 0.6% increase in asking prices. Asking prices are now 6.4% higher than they were a year ago, bringing the average asking price in England and Wales to £292,284.

Rightmove attributed the more tempered August decline to a shortage of new sellers, together with buoyant house hunting activity.

Only last week, the Royal Institution of Chartered Surveyors (Rics) highlighted a "vicious cycle" , whereby the limited choice on offer is in turn putting would-be movers off listing their home for sale.

Miles Shipside, director of Rightmove, said: "The underlying shortage of property coming to market compared to buyer demand has helped to deliver the strongest August price performance since before the credit crunch.

"Buyers can normally pick up some bargains in August as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively.

"At 0.8% down on the previous month, this is the least generous that sellers have had to be for eight years and a clear sign of upwards price pressure in the pipeline."

Rightmove research revealed that the core factors behind people's reluctance to sell were the the lack of suitable properties to move to at an acceptable price as well as the overall cost of moving.

Rightmove's report showed that several areas of England and Wales saw sellers increase their asking prices in August, with a 1.2% increase recorded in the North East of England, a 0.5% rise in the North West of England and a 0.1% increase in the West Midlands.

In Wales, asking prices increased by 0.2% month-on-month, taking the average asking price there to £177,709. Asking prices held steady in Yorkshire and the Humber with a 0% month-on-month change, while they fell by 1.2% in the East of England and the South East and by 1.4% in the East Midlands and the South West.

In London, asking prices fell by 1.3% month-on-month, taking the average asking price there to £606,826.

The Rightmove report also quoted the views of estate agents. Mark Manning, director of Manning Stainton in Leeds, Harrogate, Wetherby and Wakefield said: "In July the number of appraisals that we carried out was 21% higher than usual, so there's definitely a sense that there are a greater number of people who are considering selling, but not yet coming to market.

"With regards to stock level in the market it's not that there's no stock, it's just that when good property does come on the demand is so high that it's selling much more quickly than usual."

Alastair Hilton, manager of Winkworth in Chiswick, London, said: "We've seen strong demand and growth in prices in the past few months, especially for one and two bed flats.

"Quite a few sellers in Chiswick are looking to trade up and move out of London, and when they're not able to find a suitable property this is having a knock-on effect on the flats they're selling, increasing the demand for the smaller properties further."

Separately, house builder Bovis reported a 9% increase in profit before tax to £53.8m as it completed a record number of house sales in the first six months of the year.

The group sold 1,525 homes at an average price of £264,200 - 10% higher than the averages sales price in the first six months of 2014.

Commenting on the results, Bovis boss, David Ritchie said: "We anticipate that the addition of around 40 sites per annum will support our medium term growth strategy to deliver volumes of between 5,000 and 6,000 new homes each year".

The group's results were optimistic for the next six months: "The positive housing market conditions in the UK continue with growth in both transaction levels and sales prices. Housing demand continues to run ahead of new housing supply with the availability of development land supported by increasing levels of planning permissions."

The Government has set itself the target of of building over 200,000 new homes a year which it aims to achieve by supporting new house building through its commitment to Help to Buy and by driving an increase in land supply through reforms to the planning process.