Over three quarters of estate agents confirmed that they believe prices have reached their peak. Asking prices were on average 1.3% lower than the previous month and, further confirming the much-anticipated slowdown in the market, the annual increase in house prices was 8.5%, down from 10.3% the previous month.
In addition, 79.6% of estate agents believe that house prices have reached their highest point and will now decline.
The number of buyers on the books has returned to close to the levels of previous months coming out of the traditionally slower summer months. Some prospective buyers who have been holding off waiting for prices to hit their peak earlier in the year are now reacting to the slight drop in prices and entering the market.
In addition, they are reacting to the slowdown and attempting to achieve further discounts, securing an average of 5.5% off the asking price, compared to average discounts of around 3% earlier in the year. However, prices remain out of budget for many, as the number of first time buyers fell below 10% for the first time since last autumn, dropping to 9.6%
As buyers, sellers and agents return from their summer holidays, transactions speeded up, with the number of weeks between instruction and sale reducing. The number of viewings before a sale also reduced, from 13.4 in the previous month to an average of 12.8.
Richard Hair, president of the NAEA, says: “This report reveals what is happening at the front-line of the housing market. The further dip in prices seen this month accentuates the effect the Bank of England's persistent interest rate rises has had on the market.
“However, the steadying of prices has encouraged more buyers than is usual at the end of the summer to return to the market, and activity in general is high.
“Those who are realistic about prices are being successful whilst overpriced property is attracting little interest. Whilst it is clear that prices are not going to crash, there may well be some further small correction before normal service is resumed.”