UK house prices drop by 1.7% – Rightmove

The average asking price of newly marketed properties in the UK has fallen by 1.7% (-£6,088) this month, according to the latest Rightmove house price index.

The report suggests that sellers are adopting more realistic pricing strategies to attract buyers as the market transitions from the pandemic-induced frenzy to more normal activity levels.

Despite the monthly decline, the average asking price of £362,143 is still only 3% below the record high reached in May this year.

However, Rightmove warns that pricing right the first time remains key to securing a buyer, as the number of sales agreed is now 10% below the pre-pandemic level of 2019, improving from 15% below last month.

‘Expect to see a drop in new seller asking prices’

Rightmove’s director of property science, Tim Bannister, said: “We’d expect to see a drop in new seller asking prices in the last couple of months of the year, as serious sellers start to separate themselves from discretionary sellers and cut through the Christmas noise with an attractive price to secure a buyer.

“However, the larger than usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition.

“Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates.”

Stock shortage that drove up prices

The report also reveals that the stock shortage that drove up prices during the pandemic is over, with the number of available properties for sale now just 1% behind 2019.

However, some regions and market sectors are performing better than others in terms of sales activity and price growth.

For example, the number of sales agreed for smaller properties (studio, one-, and two-bed) is only 7% lower than 2019, compared to larger properties (four-bed detached and five-bed plus), where sales are 14% behind.

Similarly, while the Midlands and all Southern regions have seen yearly price declines, Wales, Scotland and the North of England have recorded price rises for newly marketed properties.

Two consecutive Base Rate holds

Rightmove also highlights that the two consecutive Base Rate holds by the Bank of England have helped to keep buyer demand in line with 2019’s level.

However, many homebuyers and sellers will be looking to the upcoming Autumn Statement and hoping for more than a rumoured renewal of the mortgage guarantee scheme.