By Claire West
Property website Rightmove has recorded the sixth consecutive monthly rise in new sellers’ average asking prices, up by 0.6%.
However they forecast that new sellers’ prices will fall by up to 7% in the next six months as underlying market weakness again checks the impetus normally seen in the first half of the year.
Miles Shipside, director of Rightmove comments: “2011 looks like a case of déjà vu, with the tide of housing needs yet again failing to breach the levée of restricted mortgage funding. As the seasonal surge in demand begins to fall back, new sellers’ asking prices will also have to ebb away. With mortgage approvals stuck at half the normal level, the number of sellers who can find a buyer is likely to be reduced by a similar proportion. Sellers will need to paddle hard to catch a buyer with funding, or they will find themselves well and truly grounded and unable to move home”.
The number of buyers able to proceed is limited by the availability of mortgage finance and the conditions attached to its release.
The Bank of England mortgage approval figures for April were the lowest recorded in the year to date, at 45,166 (seasonally adjusted).
However, there are signs of some slight easing of lending criteria, with estate agents reporting more loans being advertised for a 5% deposit, although only for the most creditworthy borrowers. Lenders will be encouraged to be in a more positive frame of mind should arrears continue to improve.
The latest figures from the Council of Mortgage Lenders show that arrears of 2.5% or more of the outstanding mortgage have fallen from 1.65% to 1.47% of borrowers between Q1 2010 and Q1 2011, with a consequent fall in the number of repossessions.