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Sellers Of UK Homes Decrease Asking Prices

by Jim ONeil on July 20, 2011

in Mortgages

For the first time in 2011, home sellers in the UK are lowering their asking prices. Property Web site Rightmove Plc reported that asking prices declined by 1.6 percent between June and July. The mortgage crunch is deterring buyers so sellers are taking it upon themselves to entice people to buy homes.

With a more affordable purchase price, more homebuyers may qualify for mortgage loans.

The decline is a marked change from the situation just one month before. Between May and June, asking prices increased 0.6 percent. Seven out of every ten properties put on the market in 2011 are still for sale, a statistic that is very discouraging for UK homeowners thinking of selling.

Rightmove Commercial Director Miles Shipside believes that the July decline is the beginning of a short-term trend. He stated that further decreases were expected during the next few months. Seasonal factors, lack of mortgage financing, and declining buyer confidence are all contributing to this.

The last monthly decline in asking prices occurred in December 2010, when prices dropped three percent.

Despite the decline, home values are still higher than just one year ago. They average 236,597 pounds, a 0.1 percent increase from July 2010. This increase may become a wash as sellers continue to decrease asking prices.

Rightmove tracks ten UK regions and seven of them experienced declines between June and July. East Anglia led the way with a 3.5 percent decrease and London experienced a 1.4 percent drop.

Though asking prices in London have declined, they are still 2.5 percent higher than last year. Mr. Shipside reported that the city is “less price-sensitive” than other areas of England. At the same time, many buyers in London still need mortgage loans so they are victims of restricted mortgage lending as well as the increasing cost of living and income pressures.

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