House prices have fallen for the first time this year, according to property website Rightmove.
It said the average price of property coming to market in August fell 0.3%, a drop of £1,076, to £337,371.
That was prompted by the ending of the stamp duty holiday and a subsequent fall in demand for bigger homes.
“Average prices have only fallen in the upper-end sector,” said Tim Bannister, Rightmove’s director of property data.
However, properties aimed at first-time buyers and second-steppers are still seeing high demand, leading to new record high average prices in those sectors, he added.
Rightmove figures revealed there was a 0.8% drop in the four-bedroom-plus sector, but new record price highs in the two bedroom sector, up by 0.6%, and three to four bedroom second-stepper-type properties, up by 0.3%.
Summer slowdown
Summer holidays normally lead to a slowdown in activity in August, experts pointed out, with many anticipating a slackening in demand.
“A reversal was hardly unexpected after the government started to taper the stamp duty holiday at the end of June,” said north London estate agent Jeremy Leaf.
“But when you drill down more deeply into the figures, you see more of what we are finding at the coalface, such as an improvement in demand for smaller houses and flats.”
Nick Barnes, Head of Research at estate agency chain Chestertons said: “August tends to be a quieter month but buyer interest has remained strong.”
He said there were noticeably fewer properties coming to market which inevitably creates competitive market conditions.
Home working
“Buyer demand remains strong, especially in the more affordable areas outside of London where space is generous for incoming buyers who are partly working from home and have the flexibility of travelling,” added Tomer Aboody, director of property lender MT Finance.
He said the new trend in work-life balance looks set to continue and is opening up a better spread and choice of housing across different areas, rather than restricting buyers to city centres.
“This, in turn, is driving up prices in these areas,” he said.
Rightmove predicts that more properties will come on the market when owners have more clarity over their employers’ long-term balance of home and office working.
“Their future housing needs are hard to scope out if it’s still uncertain whether the daily commute is soon going to return,” said Mr Bannister.
“If it’s going to be less restrictive in the long term, then that means less need to live close to transport networks and a greater need for home working space.”
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House prices fall for first time this year