Thrifty Loans

Property website Rightmove has reported that asking prices for property fell by 2.6% in August. It appears that Home Information Packs (HIPs) have dented the top end of the market, and sellers are losing confidence in getting as much as they could before for their properties.

The fall means that about £6,200 has come off the asking price for homes in England and Wales during August, with the average asking price now at £235,000.

Annual house price inflation, according to Rightmove, is now at 9.6%, down from 12.8% in July. The news will only serve to further jangle the nerves of an already jittery property market, but these are asking prices, not final sale prices.

Home buyers have been left battered in the last 13 months. There have been five base interest rate hikes, even more changes to mortgage rates, a huge increase in mortgage fees, the credit crisis resulting in the Northern Rock problems, and the implementation of the unpopular Home Information Packs. Last week the Royal Institution of Chartered Surveyors (RICS) showed a house price fall in July. RICS believed that the fall was caused by the fact that less larger houses were coming to market as a result of the implementation of the packs for houses with four bedrooms or more.

According to Rightmove there was a 41% drop in the number of four-bedroom-plus in August. In the first seven months of 2007 an average of 40,000 larger homes came to market, but In August it was just 23,400.

The worry is that HIPs will continue to put off buyers in the three-bedroom bracket, which came into force on 10 September. It certainly looks as though impulse buyers are being put off by the hassle of HIPs. No doubt people will come round in time, but with a cooling market and high interest rates it is not a good time to be selling or buying a home.

All areas of England and Wales saw price falls except the West Midlands, where the average cost of a home rose by 0.9%. London has bucked the trend for a long time, but even there prices fell. Falls were steepest in the South West at 4.1%, followed by the South East at 3.3%.

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