UK sellers are apparently slashing property asking prices after initially trying to resist a market slowdown.
Internet agency Rightmove said London was now home to some of the heavier discounts, with sellers knocking off an average of £21,000 in a month.
According to the company’s latest house price index, unsold stock levels are now at record highs, suggesting prices will have to come down still further before the market recovers.
Rightmove commercial director Miles Shipside said:
“Sellers coming to the market in the middle of the summer holiday season tend to be more motivated.
“London, in particular, appears to be having its own special summer sale.”
Statistics from the capital show the new asking prices are 5.3 per cent down, compared to a July rise of 0.3 per cent.
London is often seen as a barometer for the health of the UK market, and had enjoyed relatively stable prices until recently.
Rightmove also used its report to warn short-term measures by the government could do more harm than good.
The firm said a stamp duty holiday would not solve the lack of wholesale mortgage funding, adding clarity was needed on the issue as uncertainty was hitting sales.
Mr Shipside added:
“The lack of mortgage finance is central to the problem, and perhaps that is where policymakers’ attention should be focused.”
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