United Kingdom new seller home prices unchanged from the previous month in May 2012 according to Rightmove on Monday. This is the first time that sellers failed to raise their asking prices since Rightmove began publishing market statistics 11 years ago. Seller’s average property asking price continued virtually unchanged at £243,759, raising just £22 (+0%) in May from the month before. Thus, the housing market appears to be losing the moment it experiences in spring earlier than usual.
Both demand and new supply of homes softened in May. Demand declined as the first time buyer stamp duty assistance expired, mortgage rates increased and unsettling news was reported out the European region. Additionally, volume appears it will remain subdued in 2012 as a motivation of new sellers to participate in the market has slowed with supply dropping 10% in May from the month before. Furthermore, there will likely be longer than normal summer slowdowns with the Jubilee and two major sporting events. As well, new research shows that more individuals in the market are wanting to trade down rather than up as there is an imbalance age demographic participation in the market and more people from the baby boomer generation have changed housing needs.
Miles Shipside, director of Rightmove commented, “New sellers asking more in May had become the norm, so it comes as quite a shock to see prices flat at this time of year. Perhaps the first-time buyer stamp duty holiday, and the knock-on activity it helped to create, has concertinaed the market’s stronger than expected early spring momentum into the first four months of the year rather than the usual six.”
The GBPUSD has found support momentarily near 1.5800 as the markets evaluate the outcome of the G8 summit and the EU summit later this week. If the pair falls below 1.5800, we expect further downside until 1.5700.
Eugene Ross, Analyst
Admiral Markets
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