The average asking price of property coming to market has dropped by a staggering 1.3 percent this month which equates to £4,795 in monetary terms. The first price fall of the year is on a par with the average of 1.3 percent over the last 10 years. However, Rightmove claims the softening of house prices is due to summer holidays taking priority and sellers putting off moving until autumn.
Urgent sellers will be pricing more competitively to get buyers’ attention in order to try and try and move before Christmas.
Since Rightmove first launched its house price index 20 years ago, average asking prices have more than doubled from £155,994 to £365,173 which equates to 134 percent.
Average salaries have grown by 76 percent and the Retail Price Index has increased by 93 percent.
House prices have outstripped both salaries and inflation over the past 20 years.
Tim Bannister, Rightmove’s Director of Property Science, claimed a drop in asking prices is “expected this month” because the property market is moving towards more “normal” seasonal patterns after the boom of the pandemic.
The property expert said many people are also distracted by the summer holidays, with some likely enjoying their first summer holiday abroad since before the pandemic began.
He continued: “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.
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“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 seven percent annual growth, even with the wider economic uncertainty.”
Interest rate rises are likely to be at the forefront of many buyers’ minds as well as the rising cost of living.
A mismatch between supply and demand is still influencing asking prices.
Although demand is softening and more housing stock is coming onto the market, there is still an imbalance.
Buyer demand this month is down by four percent compared to 2021 but is 20 percent higher when compared with 2019.
“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.”
Jordan Yorath, Partner at Monroe Estate Agents in Leeds said: “So far in August, we have been advising some clients in the higher value property sector to market their home outside of the traditional summer holiday period.
“After a prolonged period where many people’s lives were restricted in terms of holidays and travel, we felt best that clients seek to launch their properties outside of the month of August in particular, so that they could reach the maximum number of engaged buyers when they come to market.
“July was a really strong month for us, and while some might be enjoying a summer break away, we have been busy preparing for the rest of the year, with a great number of listings also ready for September onwards.”