The frustrations of prospective house buyers looking to purchase a home of their own may soon be coming to an end, or at least may be eased a little. The latest report from giant, online estate agent Rightmove, is suggesting that house prices will soon starting dropping like a stone as homeowners looking to move on become more realistic. There is a real chance that new home insurance deals will become more commonplace towards the end of this year.

Vendors turning a blind eye to the market

The report by Rightmove is something of an eye-opener. Although the industry has been stagnating for well over a year, due to a number of factors that have all been making headlines in the press throughout the year, vendors putting their homes up for sale are still asking more and more for their properties. Incredibly Rightmove reveal that the average price of a home going on sale has risen every month in 2011 and is now 8% higher than the start of the year, a year that has seen mortgage approvals drop by half.

Asking price rocketing

At the moment the average price of a home for sale with Rightmove is slightly over £240,000, at the beginning of the year it was £223,500 and although it must be understood that many sellers will have hiked up the asking price because they were aware that buyers would automatically offer less than the brochure price, Rightmove believe June may be the month that sellers finally get a grip on reality and start to place their homes at a marketable price.

Reality will set in

Rightmove are convinced the fact that estate agents across the country are reporting more unsold properties on their books month by month because of the shortage of buyers, will start to sink in with those desperate to sell, and that prices will drop by around 7% in the second half of the year. This is just the news that many people are waiting for.

Banks slowly loosening purse strings

The difficulty prospective buyers have encountered when trying to arrange a mortgage has forced many into taking out rental house insurance on a let until the situation changes, and banks do seem to be slowly grasping the fact that people can’t afford what they are asking. Some loan providers are beginning to offer mortgages requiring only a 10% deposit without the interest rate being too prohibitive.

Basic ingredients are there

A noticeable drop in asking prices, a realistic approach to lending criteria by the banks, and low interest rates guaranteed for the short term at least, could just be the catalyst for the housing sector to gain momentum.