propertytalk Live! - 2011 falls likely as new sellers drop prices 3%

propertytalk Live! - 2011 falls likely as new sellers drop prices 3%

New sellers dropped their average asking prices by 3% in December, the fifth fall in the last six months.

The forecast now is that new sellers will have to drop their asking prices further during 2011, the extent to which hinges upon whether base rates rise and/or forced sale numbers increase substantially.

At best prices will be flat, but a drop by as much as 5% is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence.

Rightmove’s December House Price Index saw price falls on a national average basis of up to 5% are relatively minor – indeed, national average asking prices are 6.5% lower this month than they were in June. However, in areas of over-supply and where forced sales are more prevalent, a more extreme re-adjustment of sellers’ price expectations will be necessary. These are likely to be more concentrated in the north of the country.