House asking prices from new sellers suffered their sharpest fall for five years this month, while transactions are 10% below 2019 pre-pandemic levels, data from Rightmove shows.
Home prices fell 1.7% to £362,143 compared to the previous month, “as Christmas approaches and sellers continue to adopt more pricing realism to attract a buyer,” says the property website’s latest House Price Index.
This monthly decline was the sharpest fall since 2018, while annual prices are down 1.3%.
It adds that agreed sales are now 10% below 2019’s more normal market level, although this is up from a fall of 15% last month.
Average asking prices are 3% below May’s peak, “but pricing right the first time remains key to securing a buyer,” says the study.
It adds: “The pandemic-driven stock shortage is over, with available properties for sale now just 1% behind 2019.”
The Index points out: “Two consecutive [Bank of England] base rate holds [at 5.25%, a 15-year high] has helped to keep buyer demand in line with 2019’s level.
“Now, many will be looking to the forthcoming Autumn Statement and hoping for more than a renewal of the mortgage guarantee scheme.”
“Though the transition from the frenzied pandemic market back towards more normal activity levels has been slow, key indicators point to a year that so far has been better than many predicted following the turbulent end to 2022.”
However, the report points to a mixed regional market with annual falls in the Midlands and all Southern regions, while Wales, Scotland and the North of England have seen rises in the price of newly-marketed properties.
Rightmove director of property science Tim Bannister says: “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.
“It now looks like more sellers are understanding Rightmove’s research; that the chances of securing a buyer are much greater if they price right the first time, rather than over-pricing and reducing their price later.”
