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The chill in the UK housing market isn’t letting up, as high interest rates continue to cool demand from buyers. Asking prices for homes in Britain have fallen at their fastest pace in five years for the time of year, according to property website Rightmove this morning.
New seller asking prices dropped by 1.7%, or more than £6,000, this month to an average of £362,143, Rightmove reported.
It’s common for asking prices to slip as Christmas approaches, as sellers price their homes more competitively to attract buyers. But this month’s fall is the largest November drop since 2018, although they did drop by more in August and also last December.
Rightmove says 2023 has been challenging for the housing market, but more positive than predicted. Its data shows that average asking prices are just 3% below May’s peak, while the number of sales being agreed has picked up in the last month, and with more housing stock available than at the peak of the Covid-19 pandemic.
Tim Bannister, Rightmove’s director of property science, explains: '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.'
Bannister added: 'The number of sales being agreed is now 10% below the same period in 2019, improving from being 15% below 2019’s level last month. The pandemic-driven stock shortage also now appears to be over, with the number of available homes for sale now just 1% behind this time in 2019. While there is certainly no glut of homes for sale, buyers across Great Britain are likely to see much more choice in their local area compared to a year ago.'
Asking prices could continue to drop for the rest of this year, Rightmove suspects, as more sellers price their properties 'right the first time' to win a deal, rather than over-pricing and having to cut.
On a regional basis, asking prices are down year-on-year in the Midlands and all southern regions but in Wales, Scotland and the north of England, asking prices are higher.
The market for smaller UK homes is more buoyant than for large ones, Rightmove’s data shows.The number of sales being agreed for studio, one-, and two-bed properties is just 7% lower than 2019’s level. However, sales of four-bed detached houses and all five-bed plus properties, are 14% behind 2019’s level.
The agenda
• 8.15am GMT: ECB vice-president Luis de Guindos speaks at Euro Finance Week
• 12pm GMT: India’s inflation rate for October
• 3pm GMT: IBD/TIPP index of US economic optimism
• 4.05pm GMT: Bank of England policymaker Catherine L Mann speaks at the University of Oxford Environmental Economics Seminar ‘Climate and monetary policy.
We’ll be tracking all the main events throughout the day ... |
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