UK housing market shows "much-better-than-predicted resilience"
There are signs that the more stable housing market conditions will see more family movers return, says Rightmove in its latest House Price Index report, published this week.
It says many family movers put their plans on hold due to the mini-Budget fall-out and uncertainty last year.
“With mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year,” said Tim Bannister, Rightmove’s Director of Property Science.
"Big post-Christmas upturn in Rightmove traffic"
He added:” 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.”
Rightmove reports that average new seller asking prices are down 1.9% (-£6,966) this month to £355,177. Prices usually fall in December because of seasonal factors, but this month’s drop is larger than the previous 20-year average of 1.5% as sellers get more competitive.
"Prices in seven out of 11 regions are up on a year ago"
It says the 2023 market was more resilient than many predicted as it continued its slow move from frenzy to more normality. New seller average asking prices end the year only 1.1% down on a year ago, while sales agreed for the year to date in 2023’s more challenging market are just 13% lower than the same period in the more frenetic 2022. Prices in seven out of 11 regions are up on a year ago. The North West leads the way, up by 1.5% compared to last year, while the South East is the worst performer at 3.7% below 2022.
Average mortgage rates have now dropped for 19 consecutive weeks, with the average 5-year fixed mortgage rate now 5.11% compared to 6.11% in July.
Buyer demand in the mid-market, second-stepper sector has increased the most against last year’s post-mini-Budget period at +9%, while overall buyer demand has risen by 6% after some movers paused to wait for calmer conditions
Rightmove predicts that new seller asking prices will drop nationally by an average of 1% in 2024, with motivated sellers still needing to price below their local competition to secure a sale, as buyer affordability remains stretched.
"More calm and certainty heading into 2024"
Tim Bannister 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. However for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much-better-than-predicted resilience this year.”
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