August house prices drop by smallest amount since 2007 as fewer homes go up for sale

House prices fell by just 0.8% from July to August this year according to figures from Rightmove, spelling disappointment for the several hopeful homebuyers looking to take advantage of what is usually a sharp drop in prices during the summer months. Indeed house prices for August are now the strongest that theyíve been since the credit crunch on 2007 and are a whole 6.4% higher than they were a year ago

While there was a nationwide drop in house prices of 0.8%, the figures showed something of a divide in buyer confidence between the North and South of England, with Greater London showing a more typical August drop of 1.3%, with a round 1% decline throughout the rest of the South.

Typically, house prices tend to drop by around 1.5% between July and August as more sellers push to get rid of their homes in somewhat of a hurry in preparation for the summer holidays. This year however, a lack of affordable properties on the market meant that fewer people were willing to sell up, leading to a vicious cycle by which prices remained high and availability of properties remained low..

A spokesman from Rightmove, Miles Shipside said that ìat 0.8 per cent down on the previous month, this is the least generous that sellers have had to be for eight years and a clear sign of upwards price pressure in the pipeline.î

He added:
 
ì’The underlying shortage of property coming to market compared to buyer demand has helped to deliver the strongest August price performance since before the credit crunch.

ìBuyers can normally pick up some bargains in August as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively.î

The shortage of properties on the market is, according to the Royal Institute of Chartered Surveyors, the lowest itís been since records began in 1978.

The Mortgage Advice Bureau (MAB) reported that the rising house prices have contributed to an increasing number of borrowers looking to take out mortgages for extended periods. A fifth of prospective homebuyers are now looking for mortgages over a 30 year period which is an increase of 100% on the same period last year.

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