View more on these topics

Housing market hits the brakes, says Rightmove

Rightmove&#39s November edition of the Real-time Property Report reveals a fall in house prices of 0.2%.

This is in sharp contrast to the strong monthly rise of 2.7% recorded for October, and follows the exceptional 22.2% rise in prices over the last year.

The price fall is largely attributed to price falls in London, especially at the most expensive £750,000-plus end. Large numbers of job losses in the City are beginning to take their toll, and the softening of the London market can be expected to continue over the next few months.

The three months to November have seen asking prices decrease in around a third of London boroughs including Westminster (-11%), Camden (-7.6%), Tower Hamlets (-5.4%), and Kensington & Chelsea (-1.9%).

Elsewhere in the UK house prices are mostly holding up well, with large quarterly increases of 9% in the north, 6% in the north west, and 5.5% in Wales, contrasting with 2.5% in the south east (outside London), 0% in East Anglia, and a fall of 0.2% in London.

House prices have now soared to record levels as a multiple of average earnings. The November 2002 average full-time earnings are £25,070, and house prices at £155,199 are therefore 6.19 times average earnings. This is an unprecedented figure, only made possible by continuing low interest rates. If interest rates rise in the New Year, the affordability of property will quickly become unsustainable. November Real-time Property Report, based on up-to-date asking price data for houses just on the market, includes properties that will be sold up to the year-end and can therefore provide an accurate measure of the housing market ahead of other house price indicators.

Rightmove housing commentator Miles Shipside says: “Houses are now becoming unaffordable and especially so in central London. If present trends continue, house prices in central boroughs will be down 10% by the end of next year and down by around 5% in Greater London.

“However, the rest of the country is proving to be robust, and we see prices continuing to rise next year, unless interest rates rise significantly.”

Independent housing market expert John Wriglesworth comments: “Houses and flats in central London which have seen the highest rises over the last few years are now seeing reductions reflecting a decline in demand, not least due to City job losses. While I expect these price reductions to cascade to outer boroughs, historically low mortgage interest rates are helping to support house price rises elsewhere in the country where employment levels are still very high.”


How to avoid getting trapped in a net

It may seem a little bizarre for the chairman of a network to say that mortgage brokers, facing the approach of the new compliance regime, should not join a network, but that is exactly what I now believe.I should make it clear that I am not abandoning my IFA colleagues. I do feel that networks […]

The Mortgage Mole

Cheap suitsMole knows that you mortgage brokers are facing “tighter margins” “expensive overheads” and any other ways of getting out of buying your round, but the unseemly free-for-all at last week&#39s Expo mortgage conference was unsurpassed. Now Mole is not averse to a good freebie himself – champagne and days out, ahoy – but really, […]

Buy-to-let market goes from strength to strength

The buy-to-let market is going from strength to strength, reveals year end figures reported from Paragon Mortgages. Paragon reports a 47.7% uplift in gross new buy-to-let lending for the year ended 30th September 2002. Total gross new lending was £563.6 million this year against £381.6 million for the previous year. Net mortgage assets outstanding rose […]

Webline passes 5 million quotes since launch

Webline, the UK&#39s first provider of online comparative quotes to ORIGO standard, today announced that it has just passed the 5 million mark for comparative quotations to IFAs, following a record year for growth. Webline ( was established in 1995 by Paul Holland, a fully qualified IFA and the managing director and founder of the […]


News and expert analysis straight to your inbox

Sign up