UK residential real estate prices fall by most in five years

UK residential real estate prices fall by most in five years

UK residential real estate prices slid by 2.6% in December from November. That's the steepest monthly drop for the final month of the year, since 2012, according to the latest house price index from online estate agency, Rightmove. That monthly decline equates to a fall of around £8,000.

Rightmove also reported a 1.2% year-on-year rise in residential real estate prices in December, across the UK as a whole.

Meanwhile, the London market was hit even harder. According to analysis of asking prices on it’s website, Rightmove said the average price of a London property sank 3.7% in December from November – or by £23,000.

Subdued 2018 Outlook

Rightmove also outlined its view for the UK’s real estate market in 2018. It anticipates prices will rise by a meagre 1%, on average. However, there’s a little more to it than that.

The online estate agency expects the price of first-time buyer homes to rise by 3% and the average price of a second-stepper/home-mover property to rise by 2%. However, it is also forecasting a 2% drop in the price of London residential property in 2018.

“We estimate that 2018 will continue this year’s trend by being a real mixed bag of different price pressures, both up and down, said Rightmove’s director and housing market analyst, Miles Shipside. “The net result is another year of a slowing in the pace of price rises,”

“Increasingly stretched buyer affordability, exacerbated as intended by tighter lending criteria and increased stamp duty for second home-owners, is taking its toll on upwards price pressure,” Shipside said.

Forecast broadly in line with others

Rightmove isn’t the first to report its 2018 UK residential real estate prices predictions. Global property management firm Savills is also forecasting a rise of just 1% in UK house prices over 2018.

And, while the National Association of Estate Agents Propertymark (NAEA) falls short of giving a figure, it suggests the market will also show the effects of a lack of supply, but stretched buyer affordability.

“Looking to next year it will be interesting to see what impact the stamp duty change had on the market, and if it really does help FTBs,” said Mark Hayward, NEAE’s chief executive.

“We still only have a limited supply of housing available and policymakers need to think about how to help others in the chain.”

By Ilona Billington
Ilona is a freelance writer and editor with over 15 years experience reporting and writing about UK and European economics, real estate, financial markets and central banks.

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