10:03 AM, 14th November 2022, About 4 months ago
The average price of a property in the UK fell by 1.1% or £4,159 in October, data from Rightmove reveals.
And despite the weight of financial uncertainty, the fall is in line with the average 1.1% drop recorded in November during the pre-pandemic years of 2015-2019.
Rightmove says that the proportion of properties seeing a reduction is only slightly up on pre-pandemic levels, though a slowdown in activity from last year’s frenetic market has led more sellers reducing their asking price for a quicker sale.
It also appears that some new buyers are holding off for more financial certainty, while others who were already stretching themselves have now had to pause.
The figures show that buyer demand is still up by 4% on the more normal market of 2019, but down by 20% on October last year.
And first-time buyer properties continue to be the most affected sector, with year-on-year demand down by 26% in October – second stepper demand is down by 17%.
Rightmove says that the era of historically low interest rates is over, but there are signs that mortgage rates and availability are now also settling down.
Tim Bannister, Rightmove’s director of property science, said: “The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain.
“But what is certain is that the exceptional price growth of the last two years is unsustainable against the economic headwinds and growing affordability constraints.
“Homeowners who come to market in the final few months of the year tend to price lower to attract buyers in the lead-up to Christmas, and we’re hearing from agents that both existing and new sellers understand that to sell in the current market they need to price competitively.”
He added: “During the market frenzy, many agents said that they had to rip up the rule book on valuing properties due to bidding wars, but now they’re back in more familiar territory, and pricing right first time is even more critical to securing a quick sale.”
Stephen McCarron, Propertymark’s president, said: “The portal’s latest data reiterates what our member agents are seeing on the ground.
“We know that buyer demand remains strong but given the cost of living on the rise and interest rates increasing buyers are becoming more cautious with their budgets.”
He added: “However, alongside the financial strains in today’s current economic climate, this slowing in house prices was due to occur naturally given the huge spike seen in recent months, as prices achieved were unsustainable and unrealistic for many buyers in the market.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “The small drop in asking prices is certainly not unexpected given the reduction in new buyers, particularly over the past few weeks after the mini-Budget frightened the life out of many.
“Bearing in mind these are asking not selling prices, we might have anticipated a sharper correction but reflects what we’re seeing on the ground.”
Tomer Aboody, director of property lender MT Finance, said: “As we head towards the end of the year and the desire to complete on a property purchase or sale intensifies, sellers are reducing prices in order to get transactions through.
“Rising costs and interest rates are having an impact but largely buyers and sellers remain resilient.”
He added: “With the expected higher mortgage rates already resulting in buyers and sellers feeling the pinch, many of the new properties coming to market are priced to reflect this – slightly reduced to allow for extra payments as well as building in any market reduction over the forthcoming 12 months or so.”
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