London’s outer areas see biggest house price growth as number of homes for sale plummets

Homes in London are taking almost three weeks longer to sell than they did a year ago, pushing average asking prices in the capital down by a percentage point in February 2018 compared to the same month last year.

The slight annual fall in asking prices, to £627,591, comes as buyers take advantage of the cooler property market to find the best home for their budget.

Meanwhile, the average time it takes for a London property to sell is now 83 days, up from 64 days last February, according to the latest Rightmove house price index.

At the same time, homeowners have become more cautious, with those who can afford to wait to sell opting to do so in the hope that the market picks up steam. This lack of new properties for sale is keeping competition among sellers low. 

Rightmove also experienced its busiest ever month in January with more than 141 million visits, showing that there are plenty of would-be buyers for the right property. 

This combination of factors is underpinning asking prices, which jumped £26,700 (4.4 per cent) between January and February.

Homeowners in the east London borough of Hackney, which has seen the highest long-term price rises in the capital, were most reluctant to sell at a potential discount, with 22 per cent fewer homes listed for sale than a year ago.

As a result, the borough recorded the second highest rise in asking prices up 3.6 per cent to £655,000.

“The lack of new listings in the typically pricier more central locations indicates that some would-be sellers are holding back, preventing a glut of competition from forcing prices downwards,” said Rightmove director, Miles Shipside. 

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“Cash-rich owners are showing that they are able to sit tight instead of coming to market now and await their hoped-for price recovery.

“However, unless you have an extra-special property you may have to sacrifice some of the substantial price gains of the last few years to attract more buyer interest and effect a speedier sale.”

This is good news for stretched first-time buyers, who saw asking prices in their sector of the market drop slightly year-on-year to £489,500.

Almost half of all the homes sold in London last year went to first-time buyers — the highest proportion since 2001.

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Yet prices are continuing to rise faster than wages, so buyers across the capital are struggling with affordability.

With homes taking longer to sell across London, first-time buyers may now find themselves in a position to haggle if sellers are keen to move on relatively quickly.

“It is wise for sellers to be cautious and not to over price given stretched buyer affordability,” says Shipside.

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