Home sellers spark 1.9% fall in asking prices

Home sellers spark 1.9% fall in asking prices

0:01 AM, 21st August 2023, About 9 months ago

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Average new seller asking prices have seen a significant decline of 1.9%, or £7,012 this month, bringing the average price down to £364,895, research reveals.

The findings from Rightmove show the price drop marks the biggest August decline since 2018.

The platform adds that sellers are trying to attract the attention of buyers who are preoccupied with holidays, inflation concerns and the highest bank base rate since 2008.

However, the fall in asking prices, along with average earnings increasing and mortgage rates falling means that buyer affordability is improving.

Despite this average prices are still £59,000 (19%) higher than in August 2019.

‘Much larger than usual price drop this month’

Rightmove’s director of property science, Tim Bannister, said: “The much larger than usual price drop this month indicates that some sellers are seizing the initiative and heeding their agents’ advice to price competitively for their current local market conditions.

“Average asking prices are now £8,000 (2%) lower than at their peak in May, but this must be placed in the larger context of significant price growth over the past four years, with average prices still £59,000 (19%) higher than in August 2019.”

Rightmove says the average five-year fixed mortgage rate, which now stands at 5.81% and is lower than the 6.08% seen three weeks ago, is helping the market.

The platform also highlights that the current number of sales being agreed upon is 15% lower than was seen in 2019.

10% drop in first time buyer activity

There has also been a 10% drop in first-time buyer activity – a sector supported by, Rightmove says, record high rents and the scarcity of available rental properties.

It says that rents for two-bedroom or smaller properties have surged by 12% over the past year – and are 33% higher than in 2019.

The level of rent rises will continue seeing renters entering the first-time buyer sector, the firm said.

Mr Bannister said: “The typical first-time buyer sector of two-bedroom and fewer properties is down by only 10%, while the number of buyers sending enquiries to agents about properties for sale in this sector remains 1% above 2019’s pre-pandemic levels.

“The smallest-homes sector holding up more strongly is likely due in part to the frenzied rental market.”

He adds: “Average asking prices in the first-time buyer sector are down by 1% compared to last year, while average advertised rents for the equivalent type of home are up by a staggering 12% over the same period, and by 33% compared with the same time in 2019, indicating that for those who can, buying and getting onto the ladder remains an attractive option.”

Homes that are priced realistically are selling

Buyers are also facing a market that sees 10% fewer homes for sale than seen in 2019 and homes that are priced realistically are selling to buyers who are keen to move at a good price.

Rightmove says its data shows that a house that is ‘priced right’ from the outset will sell twice as quickly as a home that will see its price being reduced.

Mr Bannister said: “Our analysis shows that homes that are priced right the first time, rather than priced too high only to be reduced later, are not only more likely to find a buyer, but more likely to find a buyer quickly.

“This supports local agent reports of a two-speed market, with some properties for sale being overpriced and at risk of going stale, and many competitively priced homes which are attracting multiple prospective buyers.

“The lower level of agreed sales compared to this time in 2019 indicates the affordability challenges that many buyers currently face.”

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