Property market slow in January

Average asking prices are down by 1.9% according to the new Rightmove property index, a fall smaller than that in December which was -2.3%.

The other noticeable trend in January was that less properties were coming onto the market than last year, down to 43,000 down from 89,000 last January. However, this does potentially mean that the market will hit its bottom more quickly than in previous downturns, the report points out.

However undersupply is still an issue for buyers, and would-be vendors are not going to be encouraged by new rules surrounding HIPs which come into force in April and mean that an estate agent has to have the documents in their hands before they can market a property. The lack of new build is also an issue contributing to the lack of supply in the market as a whole.

Miles Shipside, commercial director of www.rightmove.co.uk said: ‘Would-be buyers are sniffing that 2009 could be the year of the property deal. The market has plumbed the depths, with agents reporting sales being achieved with around 25% off peak boom prices. Even though growing unemployment and an increased number of amateur landlords failing to let will add to the amount of forces sales, the reduction in the number of properties coming to market appears to be aligning supply and demand more quickly than in previous downturns. This will help to establish a price floor, and is being assisted by a potential increase in demand from improved buyer affordability due to both lower prices and cheaper mortgages.’

The report says Rightmove has also benefited from a surge of interest from would-be buyers, which generated double the activity than this time last year as those who were disenfranchised return to the market to try and pick up a bargain.