London home prices cut to lure tax-hit buyers: Rightmove
The picture is similar in the South West and the South East, which registered the largest monthly price drops in the UK
[LONDON] London home sellers slashed almost £7,000 (S$12,167) off their asking prices in June to attract buyers facing higher taxes and greater choice, according to real estate agents.
The average price sought fell 0.9 per cent to £695,414, according to a report by property website Rightmove published on Monday (Jun 16). Sellers in the UK capital and other pricey regions are offering discounts to offset the impact of April’s increase in transaction costs.
The picture is similar in the South West and the South East, which registered the largest monthly price drops in the UK. Home values in these regions are also taking a hit due to more Britons selling their second homes in coastal hotspots such as Devon and Cornwall in response to higher taxes on such properties.
Asking prices fell across the UK, bringing the average home value to £378,240, down 0.3 per cent from May, the report showed. While sellers typically raise their price demands in June, the market is currently under pressure from increased homebuying taxes and an 11 per cent yearly increase in the number of homes for sale.
Rightmove had estimated in February that some first-time buyers would pay more than £11,000 extra as a result of the thresholds for paying stamp duty being lowered on Apr 1.
“It appears that we are now seeing the decade-high level of homes for sale, and the recent stamp duty increases in England, have a delayed impact on new sellers’ pricing,” said Colleen Babcock, a property expert at Rightmove.
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“Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.”
Rightmove offers one of the earliest snapshots of the housing market emerging from a volatile period. House sales whipsawed in recent months as buyers brought forward transactions in a race to beat the stamp duty increase.
The report chimes with warnings from the Royal Institution of Chartered Surveyors, whose house-price gauge fell to the lowest level in almost a year in May.
However, Rightmove said demand remains resilient as households continue to enjoy real wage growth and affordability improves with the prospect of further interest-rate reductions from the Bank of England this year.
“Buyers have more choice than ever, so the combination of a rare abundance of high-quality properties at much reduced guide prices in the prime coastal areas, is resulting in the tide finally turning in a positive way,” said Josephine Ashby, managing partner of John Bray Estates. BLOOMBERG
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