Prices drop in the North West, says Rightmove

Average house prices in the North West have dropped 1.0% in the past month, according to the online estate agency portal.

Rightmove said average asking prices in the region dropped from £168,944 in April this year to £167,317 in May 2010.

Compared to the other regions, the North West contrasted to the rise in prices shown in the West Midlands, South East, Yorkshire, East Anglia, while in London the average house price also showed a drop in price within the past month.

Rightmove said the average asking price in the North West in May last year was £163,239, which has shown that the annual change has shown a 2.5% increase.

Speaking about the England and Wales market, Miles Shipside, commercial director of Rightmove, said: "In May last year average asking prices rose by 2.4%. The average May increase over the past decade has been 1.5%, so with a more modest monthly increase of 0.7% there are signs that this year's sellers are now toning down their bullish spring price expectations. What they have not done is stay off the market, or be put off by the political uncertainty. In the last full week before the election, Rightmove recorded its highest number of new listings for nearly two years.

"There aren't enough ready-and-able buyers to soak up a surge in fresh stock. If more property was at last year's bargain prices then cash-rich investors could be tempted out of the woodwork to help make up for the missing mortgage-reliant buyers. One year on, sellers' prices are less tempting, and that will lead to an over-supply in less popular areas.

"We forecast that prices in 2010 would end up broadly flat, with gains in the first half of the year falling away in the second half. This pattern seems to be emerging as supply begins to outstrip demand in the less desirable locations.

"The new coalition Government faces a tough challenge in fixing the 'broken' housing market. This may become increasingly difficult if the Greek illness turns into a European pandemic causing a relapse in the condition of the financial markets. There is also the looming issue of reducing public sector spending by £6bn. This will have an impact on the financial position of thousands of employees whose jobs depend on the public sector and a resulting knock-on effect on the health of the housing market."