Unsold properties to force down prices

Average property asking prices are set to fall from a record high in June as the growing number of unsold properties on the market forces sellers to become more realistic.

The average price at which a home is put on the market rose 0.6 per cent, or £1,520, to £240,394 between May and June, said property website Rightmove, with prices in London reaching fresh peaks.

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Prices have risen every month so far in 2011 and are now up 8.1 per cent, or £17,984, in the year as sellers’ expectations have “romped away from reality”.

But with mortgage approvals at half of pre-crisis levels and unsold homes piling up on estate agents’ books, the agency predicts that asking prices will be forced back down in the second half of the year.

It forecasts that prices will drop by up to £16,828 to £223,566 in the second half of the year. But that would still leave them more than £1,000 higher than the £222,410 average at the start of the year.