House prices to fall by 1% in 2024

House prices to fall by 1% in 2024

9:04 AM, 4th December 2023, About 6 months ago

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The average new seller’s asking price will fall by 1% nationally by the end of 2024 as the market cools down after the post-pandemic boom, Rightmove warns.

The UK’s largest property portal has released its forecast for the housing market and says that sellers will have to price their homes more attractively to secure a buyer next year.

And agents will have to work harder to build chains, especially for first-time buyers who will face affordability challenges.

Rightmove’s prediction is in line with its forecast for 2023 which was for a 2% drop in average new seller asking prices.

The portal says that prices are currently 1.3% lower year-on-year.

‘Fall of 1% in new seller asking prices’

Rightmove’s property expert, Tim Bannister, said: “We predict a modest average fall of 1% in new seller asking prices next year.

“This will be felt more keenly in some areas of Great Britain than others.

“The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand.”

He adds: “In areas with more discretionary sellers and fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.”

Average time for a seller to find a buyer

The housing report also highlights that the average time for a seller to find a buyer has increased from 45 days this time last year to 66 days now.

Sellers who have been realistic on price are finding a buyer more quickly.

The portal also reports that the level of price reductions has risen during 2023, with 39% of properties now seeing a price reduction during marketing, compared to 29% last year and 34% in 2019.

New sellers will have to compete with their cut-price neighbours, and work with their agent to start their marketing with a competitive price, rather than starting too high and needing to reduce later.

‘No significant signs of forced sellers’

Mr Bannister said: “This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties.

“However, it has been a challenging change in mindset for some sellers to transition from the frenzied market of the previous few years.”

He added: “The level of sales being agreed is 10% lower than at this time in the more normal market of 2019, so sellers will need to price even more competitively next year to make sure that they secure a buyer.”

Providing movers with more stability and certainty

Rightmove says that average mortgage rates have fallen steadily since July, providing movers with more stability and certainty over the type and cost of mortgage offer they are likely to receive, compared to the more volatile mortgage market of this time last year.

The average two-year fixed rate is now 5.52% and average five-year rate is 5.11%.

However, the platform warns that affordability remains an issue for many buyers, especially as the Bank of England Base Rate has peaked and is unlikely to be cut soon.

The firm also says that buyers will have more choices of homes for sale in their area that suit their needs, compared to the stock-starved pandemic years.

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