The price of property coming to market in the last four weeks is 1.2 per cent (-£3,602) lower than the previous month, according to Rightmove’s latest index.
It is usual for sellers who come to market in the summer holiday season to price more cheaply, but there have only been larger drops in two of the last six years since 2010, noted the research taken from over 90 per cent of the market.
The timing of Brexit uncertainty has coincided with both the seasonal slowdown and a continuing lull following the first quarter buy-to-let surge, marking 2016 out as a year of two halves.
How different they are will depend upon the strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appears to be the most subdued, according to Rightmove.
The firm’s director and housing market analyst Miles Shipside noted the average fall in new seller asking prices at this time of year has been 1.2 per cent over the last six years, so this month’s fall is exactly in line with the long-term average.
“The largest price falls at this time of year were -2 per cent and -1.3 per cent in 2014 and 2010, with the smallest fall being -0.8 per cent in post-election boosted 2015,” he explained.
Larger homes would benefit most from an autumn pick-up, those with four bedrooms or more, which are taking the longest time to sell - an average of 74 days from being advertised on Rightmove to being marked as sold subject to contract by estate agents.
This ‘top of the ladder’ sector is also suffering the largest drop in new seller asking prices this month, with a fall of 2.9 per cent.
First-time buyer (two bedrooms or fewer) and second-stepper type properties (typically three bedrooms) are performing the best, with an average time to sell of 58 days and price drops of 0.5 and 0.4 per cent respectively.
Southern regions are on average more highly priced than other parts of the country and more influenced by the dynamics of the London market, so have had the biggest jump in the number of days to sell in the last two months.
Time to sell in London has increased by five days between May and July, the south east and south west are up by four days, while the east of England region is up by three.
As predicted when the April deadline was set for the additional tax on second homes, many transactions that might have occurred later in the year have been brought forward.
This resulted in the first half of 2016 recording property transactions, up by 12 per cent on the same period in 2015, according to the most recent HM Revenue & Customs data.
The outcome of the second half hangs on the extent of the summer slowdown and the strength of the traditional autumn market rebound, stated Rightmove.
July buyer enquiries to agents were 1 per cent down on election-boosted July last year, though are 4 per cent up on July 2014, which is a better basis for like-for-like comparison. Buyer enquiries to estate agents were down from June to July, but by a modest 5 per cent to 1.6 million.
Mr Shipside added: “By autumn we should get a clearer view of the strength of any post-referendum hangover, though that also depends on buyers’ confidence to turn this interest into action.
“The latest interest rate cut making already cheap-to-borrow money even cheaper should act as an added boost to confidence.”
Jeremy Duncombe, director of the Legal & General Mortgage Club, said July has been an interesting and unpredictable month following the UK’s decision to leave the European Union.
“The reality is however, that not much has really changed and the underlying housing market continues to remain strong due to a combination of low rates, high demand and lack of supply.
“Apart from small pockets of the country, house prices are still rising – even if slower than before,” he added.
peter.walker@ft.com
