Forecast of Further Falls in 2011 as December Sellers Drop 3%

Dec 13, 2010, 02:00 ET from Rightmove Group Ltd

LONDON, Dec. 13, 2010 /PRNewswire/ -- Rightmove's December House Price Index saw new sellers dropping their average asking prices by 3% over the past month, the fifth fall in the last six months. This leaves the average asking price for a property in the UK at 222,410 pounds Sterling.

Rightmove forecast that new sellers will have to drop their asking prices further during 2011, the extent to which hinges upon whether base rates rise and/or forced sale numbers increase substantially. At best prices will be flat, but a drop by as much as 5% is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence. Price falls on a national average basis of up to 5% are relatively minor – indeed, national average asking prices are 6.5% lower this month than they were in June. However, in areas of over-supply and where forced sales are more prevalent, a more extreme re-adjustment of sellers' price expectations will be necessary. These are likely to be more concentrated in the north of the country.

Shipside adds: "In spite of economic woes, un-seasonally high numbers of searches on the Rightmove website show that prospective buyers are still looking, perhaps watching and waiting for the right buy to whet their appetite and fit their pocket. Sellers are going to have to price more competitively in 2011."

The forecast for 2011 comes against a backdrop of falls in five of the last six months. This is the second largest fall we have ever recorded in the month of December, and the biggest reverse for three years. This re-adjustment means that average asking prices have, after a year of contrasting halves, remained at a virtual standstill at just 0.4% above where they were a year ago. This ties in with Rightmove's December 2009 forecast of flat prices for 2010.

Shipside adds: "We cannot see conditions on the immediate horizon that would cause a significant fall in prices unless the credit crunch tightens. A continuing drift of a few per cent similar to what we have seen in the latter part of 2010 is likely in 2011 until the economic recovery gathers real pace. This would mean that house prices could well be around 10% lower than the mid-point of 2010, helping overall buyer affordability and housing market recovery".

For further statistics and to download the Rightmove December 2010 House Price Index please visit - http://www.rightmove.co.uk/news/house-price-index.html or search for local house prices at http://www.rightmove.co.uk/house-prices.html

Rightmove Press Office, press@rightmove.co.uk, 0207 087 0700

SOURCE Rightmove Group Ltd



RELATED LINKS

http://www.rightmove.co.uk