Rightmove has reported that the average price of property coming to market fell by 1.3% in August (-£4,795) to £365,173.
This is the first price fall of the year, although traditionally prices do fall in August, and this drop is on a par with the average of 1.3% over the last 10 years.
The property website said that some of the more urgent sellers who are coming to market are pricing more competitively in order to capture the attention of a suitable buyer quickly and attempt to beat the average time of 136 days to complete a sale and move before Christmas.
This month also marks 20 years since the first Rightmove House Price Index was published; since it began national average asking prices have more than doubled (+134%) from £155,994 to £365,173. Average salaries have grown by 76% and the Retail Price Index has increased by 93% in the same period, so house prices have been outstripping both salaries and general inflation over those 20 years.
Tim Bannister, Rightmove’s director of property science, said: “A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays. Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic.
“Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home. To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and a half months. Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end year at around 7% annual growth, even with the wider economic uncertainty.
“Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years. It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move. Demand has eased a degree and there is now more choice for buyers, but the two remain at odds and the size of this imbalance will prevent major price falls this year. For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “The only surprise about these figures is that the drop in asking prices has taken so long to show up after we noticed a reduction in buyer and seller activity ‘on the ground’ a few months ago. Summer holidays are also proving a distraction with many decision makers taking advantage of the fine weather here and abroad. But the market is also baring its teeth and demonstrating familiar resilience. Lack of choice, low unemployment and increasing rents are continuing to support demand. Therefore, no significant change in property prices is expected at this stage despite increasing concerns about the rising cost of living and interest rates.”
