Renters who thought they couldn't afford to buy property may change their minds as house prices continued to drop for the second month in a row.
The average newly marketed property asking price fell by over £4,000 in August, from £236,332 (July) to £232,241, according to figures from Rightmove. The monthly change of -1.7% follows on from a -0.6% drop from June to July.
Over-supply and the banks' reluctance to approve mortgages, combined with the August lull, has added to the downward spiral of prices.
"No one really wants to come to market in August unless they have to. It shows these new sellers have a compelling need to sell, as they have lopped over £4,000 off the average asking price," commented Miles Shipside, director of Rightmove.
"Holidaying buyers can relax on the beach while back at home sellers are reducing the cost of their future property by the price of the family holiday."
Rightmove has predicted that the price gains of 7% made in the first six months of 2010 will have dissolved by the end of the year. Including August figures, prices have already fallen back by 2.3%.
"There needs to be a spur to cause prices to rise. However, as mortgages won't become available to the masses and last year's stock shortages show no sign of re-appearing, we can't see it happening during the remainder of 2010.
London was not immune to the falling price trend. New to market properties in the capital saw the second biggest regional drop of -4.1% month-on-month (£422,248 to £405,058), the first fall of 2010 for the Greater London area.
According to Rightmove, six out of 10 renters who would like to buy a property say they cannot afford to. So falling prices coupled with low interest rates could be the boost onto the property ladder that renters need.
"The next twelve to eighteen months could provide a window for those who can just meet minimum deposit and creditworthiness criteria, as affordably low rates and lower property prices could marry up.
"In addition, a period of higher inflation that outstrips flat or falling property prices makes buying even cheaper in real terms as long as your salary is going up in line with inflation," added Shipside
If you think now is the time to make your move onto or up the property ladder, the Moneyfacts Best Buy tables can help find the mortgage to suit you.
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