Average asking prices in Britain fell by 2.3% or £7,218 this month, and are down by 0.1% compared to August last year at £301,973, the latest index shows.
Sales are also down, with a fall of 0.8%, according to the Rightmove house price index which suggests that it is a seasonal downturn and the market is likely to pick up again in the autumn.
It explains that the fall in new seller asking prices maintains the historical trend of sellers coming to market in the peak summer holiday month pricing aggressively to try and secure quicker sales.
The 2.3% drop is slightly bigger than the 2.1% fall in August 2017, with the major drag on the national average being the more subdued market in London and the commuter belt region of the South East. If those two regions are excluded then the rest of the country has a monthly drop of 1.5%.
‘Sellers who come to market in the peak holiday month often have a pressing need to sell and price down accordingly, and are offering summer sale prices to entice holiday distracted buyers,’ said Miles Shipside, Rightmove director and housing market analyst.
‘The market started its most recent cyclical price upturn in 2010, and since then the average price of property coming to market has gone up by 32%, stretching buyer affordability. More substantial discounts are therefore required to tempt warier buyers, with higher house prices also tightening the purse strings of lenders,’ he pointed out.
‘With lacklustre average wage growth, more buyers are bumping up against the tighter lending criteria brought in four years ago following the mortgage market review, which were intended to prevent another boom and bust cycle,’ he added.
A breakdown of the figures shows that asking prices fell month on month by 3.8% in Scotland to £152,899 but are still 3.8% above a year ago while they fell by just 0.1% on a monthly basis in Wales to £196,278 and are 4.9% up year on year.
The biggest monthly fall in England was in London where asking prices were down by 3.1% to £609,205 and they are 1.2% down year on year. They also fell considerably in the South East, down 2.3% month on month to £402,562 and they are up just 0.6% year on year.
Overall, year on year new seller asking prices are muted at 1.1% higher than a year ago, which Rightmove says helps buyer affordability. Sales agreed numbers are broadly flat, down by 0.8% compared to this time last year, and as 2018 progresses they are improving compared to their position earlier in the year.
Shipside believes that the bad weather in March and April was a factor in sales agreed numbers being down by 5.4% year to date but they are on an upward trajectory and are now 3.5% down year to date.
‘Overall in spite of political uncertainty sales agreed are holding pretty steady and it is usual for there to be an upturn in prices and buyer activity as we head into the Autumn season, especially if sellers maintain their cheaper pricing to attract buyers,’ he explained.