September 2007 marks the second month in a row where no monthly price growth has occurred in the prime country property market. The so-called ‘credit crunch’ has begun to spread uncertainty throughout the property market and the impact is starting to be realised, as some key regions record a drop in average prices month-on-month.
In particular, the South East and South West regions (the strongest performing areas in terms of price growth over the last six months) have begun to record a decline. This represents the first monthly fall in average prices since March 2006. Areas such as Hertfordshire (down 1.7%), Surrey (down 2.8%) and Buckinghamshire (down 4.4%) have all contributed to the overall decline across the region. In the South West, areas such as Dorset (down 1.3%) and Somerset (down 2.5%) have also reported a drop in prices between August and September.
The volume of property for sale on the market is currently very high, with numbers up 32.6% on this time last year. So, with buyer caution becoming more prevalent and rising property volumes coming to market, the likelihood is that prices will continue to remain flat in the months ahead.