Sellers Wipe £1.3 billion Off Home Values in Just a MonthMake Text Bigger
Frustrated sellers have wiped £1.3 billion off the value of homes on the market in just one month as they bid to move home.
More than 80,000 home prices were slashed by an average £16,632 in October as owners desperate to move before Christmas tried to promote interest in their properties, according to propertyhome.co.uk.
Although prices dropped everywhere outside London and the South-East, confidence in the market remains low, said the firm.
The findings also revealed most homes are on the market for just over 19 weeks – but the number of available properties has dropped by 15% compared with October last year.
“The autumn property market slowdown is more acute this year than in 2010,” said the report. “Homes are spending more time on the market and prices are flat.
“London and South-East are the exceptions to the gloomy national picture as they are relatively buoyant.”
Meanwhile, HSBC Bank reports 360,000 first-time buyers who bought a property in 2007 are likely to be trapped in their homes with a cash shortfall of £11,000 stopping them from moving on.
Typical first time buyers with a 10% deposit at the height of the housing bubble would have invested £16,000 in their home, which will now be worth just £5,000 due to falling property values in the intervening years.
The bank reckons the cost of selling for these homeowners is around £27,000 – and if they have only made interest payments on their original home loans, the shortfall will be nearer £22,000.
“These findings highlight the need to save or pay down an existing mortgage in order to fund that second step on the property ladder; first-time buyers can no longer rely on rising house prices to provide them with the deposit needed for their second purchase,” said a spokesman.
“Making overpayments on the mortgage is one way that these movers can help build up their finances to take the next step up the property ladder. This increases the equity in their first home, and bolsters the deposit available to them for their onward move.”
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