According to Rightmove’s House Price Index, the fall in asking prices was due to more new sellers looking to price below competition as the housing market was now a buyer’s market.
However, the online estate agency also noted that the housing market this year was more resilient than many expected continued its “slow transition from frenzy to normality”.
The report continued that national average seller average asking prices were 1.1 per cent down from a year ago and sales agreed for the year-to-date 13 per cent lower than the same period last year.
It said that higher mortgage rates were a “key challenge” for moves this year and affordability was still “stretched”.
Rightmove said that number of sales agreed was “better-than-expected” and three of the ten strongest months on record for buyer demand were in the first half of the year.
Asking prices up year-on-year in most regions
The report added that prices year-on-year were up in seven out of 11 regions with the North West reporting the largest increase at 1.5 per cent compared to last year and the South East being the worst performer with a 3.7 per cent fall year-on-year.
Rightmove said that average mortgage rates had fallen for 19 consecutive weeks, and the average five-year fixed rates was one per cent lower at 5.11 per cent compared to July.
The company added that buyer demand in the mid-market and second-stepper sector was nine per cent up compared to the same period last year and overall buyer demand had risen by around six per cent.
Rightmove said that it expected new seller asking prices to drop nationally by an average of one per cent in 2024, noting that motivated sellers would need to price below local competition to secure a sale and buyer affordability was still stretched.
‘More calm and certainty heading into 2024’
Tim Bannister, Rightmove’s director of property science said: “Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively.
“We entered this year under a cloud of uncertainty, as the fallout from the Autumn mini Budget filtered through to lower activity levels. High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year.”
He added: “However for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1 per cent in asking prices highlights the market’s much-better-than-predicted resilience this year.”
Bannister added the mortgage rates were more “settled” and on a “slow downward trend” so moves who had been waiting for a calmer market could decide to act at the start of next year.
He continued: “Indeed, there’s always a big post-Christmas upturn in Rightmove traffic, with early bird-buyers starting their search on Boxing Day. This year’s upturn will be eagerly anticipated by those who are keen to sell, especially family movers who are considering having an estate agent board put up as the Christmas tree comes down.
“Rightmove’s research and agent feedback is that the best strategy to sell in the current market is to price temptingly at the outset of marketing, rather than testing the waters with a higher price. This will hopefully avoid the need to reduce your asking price later, and capture that early-bird buyer’s interest in the New Year, whilst also avoiding the stress of drawing out the selling process and risking having the for-sale board still up at Easter.”
