All those returning from their summer holidays with a move in mind will need to adjust to a new mood in the market.
All those returning from their summer holidays with a move in mind will need to adjust to a new mood in the market. The shoots of a slowdown noted in the early summer have taken hold as prices appear to have slipped and sellers outstrip buyers.
A survey of the national market last week by Hometrack, the property data company, shows that average prices have fallen fractionally - 0.1 per cent - but that was greater in parts of the South-east, which saw a drop of 0.4 per cent. At the same time, the number of buyers registering had shrunk by four per cent. The house price index from Rightmove, the property website, shows a more dramatic slowdown, with asking prices falling 2 per cent in five weeks "knocking almost £4,000 off the asking price of the average home". The South is leading the market downwards and where there are still increases - in Yorkshire, the North and the North-west - they are smaller than in previous months.
So should all those preparing to sell be unduly anxious while buyers rub their hands in glee? Not if we look at what is actually happening on the ground. In central London, prices haven't changed much in two years, while the slow-down elsewhere is precisely what the Bank of England ordered, given that continuing rises would have led to a sticky end. At Rightmove, commercial director Miles Shipside points out that "this is not the beginning of a long period of declining prices but rather a sign that the market is responding the way it should do - responding to higher borrowing costs and the effects of supply and demand".
What's more, in many parts of London, in particular, the market has taken a traditional summer break, a factor that is not reflected in all surveys. What will be crucial to sellers this autumn is pitching the asking price at the right level. "Realism is the order of the day," adds Shipside. For vendors that should mean rejecting those agents who buy business with high valuations. Matthew Harrop, director of John D Wood in Kensington, agrees. "Buyers should do their homework and if the asking price for a house is £1.5 million where comparable properties have sold for £1.4m, they will put in lower offers. The perception, though, is that the vendors had to make a reduction. Buyers use negative reports and higher interest rates to make lower offers. But if it can be shown by agents that the asking price is sensible, they will pay it."
There is also the danger that buyers will be put off even making offers on overpriced properties. A house that John D Wood brought to the market for £1.65m sold for more than this to a purchaser who had not even made an offer, when it had been with other agents for £1.85m, even though the highest offer then was well below the final figure.
Realistic pricing does seem to have filtered out from London into the country house market. Robert Bartlett, head of farms and country estates at Cluttons, says that a number of vendors in the £700,000-to-£1.5m bracket have had to lower their expectations. Anything overpriced is either sticking or receiving lower offers.
Indeed, the evidence is that buyers will not even view a property they regard as too expensive. Where once they might have calculated that inflation would eat into an extravagant price, they are now playing safe and are far more risk averse. They have at present - September may be a different story - the luxury of being able to shop around.
In Plymouth, for instance, John Waldrom, area director of Connells estate agents, notes that buyers are driving a hard bargain and expect more value for money. His point that we are returning to more "normal" trading conditions, with fewer asking price offers, is worth noting. Buying chains, negotation and informed valuations are tasks that some estate agents have managed to avoid in recent years. Expert advice is no longer an optional extra.