It has predicted that asking prices across England and Wales will fall 7% in the second half of the year, mirroring the pattern of 2010.
However, Rightmove has changed its forecast that the year will end with house price falls and now expects an increase of 2% for the year as a whole.
Rightmove’s index revealed the average property asking price grew for the sixth consecutive month by 0.6% in June to £240,394 – the highest price ever recorded by Rightmove for June.
However, this was down from April’s increase of 1.3% and a marked slow down on previous months’ growth.
Miles Shipside, director of Rightmove, said: “With mortgage approvals stuck at half the normal level, the number of sellers who can find a buyer is likely to be reduced by a similar proportion. Sellers will need to paddle hard to catch a buyer with funding, or they will find themselves well and truly grounded and unable to move home.”
Indeed, the latest CML figures reveal that, while gross mortgage lending increased 12% to £11.3bn in May, lending for house purchase remains below the levels recorded for the same month last year.
In addition, interest in remortgaging is also predicted to reduce as the expectation of a rise in base rate decreases.
Michael Coogan, CML director general, said: “Gross mortgage lending in May recovered after low activity levels in April. Distorting effects from Easter and bank holidays cloud the current picture, but the likelihood seems to be for essentially flat levels of lending over the next couple of months.”
Shipside said that rising stock levels show that buyer appetite is not keeping pace with supply, while asking prices are being pushed up as many sellers are able to take their time to sell.
He said: “High levels of unsold stock and record asking prices cannot remain happy bedfellows for long. We expect to see this romp away from reality to reverse itself in the second half of the year as the oversupply of property and undersupply of mortgages reassert themselves and exert downwards price pressure. This could be good news for buyers who have been sitting on the sidelines.”
