Property prices slip as oversupply hits sales market

The UK’s housing market is quickly cooling as a glut of properties for sale starts to drag down prices and sap confidence among buyers, new figures show.

According to Home.co.uk, the shift is no longer confined to weaker areas with regions that recently propped up national growth are now struggling.

For months, northern markets have managed to hold up thanks to landlords looking for buy to let investment opportunities.

But with negative capital gains in real terms and rents now sliding, that investment impetus is starting to fade.

Mortgage rates to drop

The report states: “As we head into the festive period, we can expect significant on-market reduc­tions and more competitive pricing of new listings.

“Vendors can expect offers to come in below the asking price as buyers increasingly have the upper hand.”

It goes on: “Regarding mortgage rates, there is some reason for optimism.

“A cut in the Bank of England base rate now appears to be priced in to the two-year swap rate.

“This cut is expected to coincide with the MPC’s December meeting where they will be dealing with the aftermath of Rachel Reeves’ Autumn Budget.”

Houses prices to fall

Many would-be buyers are pausing their home search until there is clarity on both monetary policy and the financial backdrop.

Asking prices show that the average for England and Wales fell by 0.4% in October with the steepest month-on-month falls came in the North East and Yorkshire.

The report says that overall real house prices fell by 4.2%.

That’s partly down to growing issues with rising unemployment and the prospect of tax increases in the November Budget.

It adds that as the festive season approaches, the market is bracing for sharper price reductions.

Agents are also expecting vendors to cut prices more aggressively, while buyers increasingly test sellers with lower offers.