UK housing woes deepen with first asking-price drop since 2011

[LONDON] UK asking prices fell from a year earlier for the first time since 2011, led by declines in London and among the most expensive properties.

Asking prices slipped 0.2 per cent to 302,023 pounds (S$526,000), according to Rightmove. Prices were 1.7 per cent lower compared with October, the biggest drop for the month since 2012, the property website said on Monday.

The property market in Britain is weakening after a three-decade boom in which price growth vastly outstripped wage gains. The uncertainty around the outlook for the UK's divorce from the European Union is also making buyers more cautious and prompting sellers to be less ambitious with asking prices.

"New sellers and their agents are reacting to market forces and lowering their pricing aspirations by more and sooner than usual," said Miles Shipside, a director and housing market analyst at Rightmove. "Stretched buyer affordability and the cooling markets in the south and in upper price brackets have combined with the ongoing political uncertainty to change pricing optimism into pricing realism."

In Greater London, asking prices fell 2.4 per cent annually to 614,271 pounds. Homes located within Transport for London's Zone 1, the center of the city, fell the most with a 6.9 per cent retreat on the year to an average of 1.3 million pounds. The declines aren't as dramatic further from the center, where average prices are lower. Values in the outer-most Zone 6 actually rose 3.1 per cent from a year ago.

Rightmove's data is compiled from 123,536 asking prices of properties put on sale by agents across the country from Oct. 7 to Nov. 10.

BLOOMBERG