–UK June House Asking Prices Up 5.0% y/y
–Large Jump In Unsold Stock on HIPS suspension, CGT Rise
–Unsold Stock Levels Highest Since Oct 2008
–Rightmove: UK House Prices Set To Fall As Austerity Measures Bite

LONDON (MNI) – UK house asking prices rose for the sixth month in a
row in June, but the pace slackened to just 0.3% month on month from
0.7% in May and 2.6% in April, according to the UK’s largest property
website, Rightmove.

The annual rate for June came in at 5.0% versus 4.3% in May. The
suspension of the former Labour government’s Home Information Packs,
reductions in public spending and speculation of an increase in the
Capital Gains Tax brought a surge of new sellers to the market.

“Together, these factors are likely to put an end to this year’s
recovery in house prices,”said Miles Shipside, commercial director of
Rightmove.

Rightmove recorded an increase of 22% in new sellers coming to
market, resulting in a large jump in unsold stock.

“A surge of HIP-free properties has come to the market, and
mortgage-reliant buyers and wary investors are failing to match the
increased supply”, Shipside said. “That spells tougher times for sellers
and tenants, with more properties for sale and fewer finding their way
into landlords’ hands.”

Rightmove predicts that new seller prices will fall during the
second half of 2010 to give an overall price standstill for the year.
Average asking prices rose for ten out of the last 14 months and rose
7.4% in the first six month of 2010.

The new government’s austerity measures to reduce the budget
deficit are likely to heighten buyer nervousness about job security and
spending power. Rumors that the new coalition government may raise the
capital gains tax, with first homes exempted, could “permanently dampen
the enthusiasm of the all-important investor market,” Rightmove said.

“Serious sellers in all but the most popular hotspots are going to
have to reduce their asking prices unless buyer demand recovers after
the World Cup”, Shipside said.

The average unsold stock per estate agency branch jumped to 74 from
71, reaching its highest level since October 2008. This is the fourth
monthly rise in succession and is unusual at this time of year when
stock normally starts to decrease in May, according to Rightmove.

–London newsroom: 4420 7862 7499; –e-mail: stephanie.sprague@ntkn.com

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