UK House Prices Fall in September Amid Heatwave

The heatwave caused house prices to tumble in September as buyers and sellers were distracted from the housing market by the weather, according to property website Rightmove.

UK home prices fell by 1.5% on the month in September, said Rightmove, despite a number of mortgage-market stimulus schemes fuelling a surge in demand for a constrained supply.

On a year-on-year basis, prices increased by 4.5% in September. The number of new sellers of property fell by 9% month-on-month in September, the lowest level since February.

"New seller activity has fallen again this month and the lower volumes of property coming to market over the summer have resulted in price drops that seem counter-intuitive given that buyer demand is holding up," said Rightmove Director Miles Shipside.

"Improving buyer activity appears to have become even further out of sync with sellers' appetite to come to market during the summer heatwave."

Rightmove noted that fewer people choose to sell their properties during the summer holiday season and those who were selling have priced their properties lower to sell quickly.

Forecast Lift

Despite the seasonal decline in September, the website raised its 2013 forecast for house price growth from 4% to 6%, as high search activity and a fall in stock of property on agents' books are expected to create an autumn price surge.

In August, Rightmove's traffic increased more than 20% year-on-year, while average property stock per estate agency branch has fallen from 72 properties to 70 amid high demand.

"We forecast the national average increase in new seller pricing for the whole of 2013 to be in the region of 6%, partly driven by the strength of southern markets but increasingly contributed to by the more buoyant areas of the north," Shipside said.

"The autumn market is set to heat up as the weather cools down following the summer lull in fresh property supply. While prices fell during the month overall, the last couple of weeks have seen the start of a turnaround, with more sellers choosing to come to market and pitching at higher prices as momentum rebuilds.

"This month's failure to deliver fresh supply and the resulting fall in property on agents' books will 'prime the pump' for an autumn price surge as buyer confidence and activity continue to increase."

London Market

Prices declined 1.1% in London from the previous month, but they rose 8.2% year-on-year. City of Westminster saw the highest monthly fall in home prices at 7.4%, followed by Camden at 5%, Brent at 3.5%, Kensington and Chelsea at 3.3% and Greenwich at 3.1%.

Meanwhile, prices went up 2.3% in Croydon, 2.2% in Tower Hamlets and 1.5% in Bexley.

Among other UK regions, only the West Midlands witnessed monthly price rise at 1%. Prices were down 3% in the South East, 2.6% in the East Midlands, 2.3% in the East Anglia and 2.2% in Yorkshire and Humberside.