Average price of property coming to the market rises by 0.9% (+£3,398) in October, reports Rightmove
The average price of property coming to the market rises by 0.9% (+£3,398) in October to a new record of £371,158, reports Rightmove today, Monday October 17th.
In its latest House Price Index report Rightmove says that shortage of property for sale continues to underpin prices.
It says that “a new asking price record may seem surprising given the market uncertainty that followed the government’s mini-budget in late September, but it will take time for any impact to filter through to house prices.
“There is also little sign of downwards price pressure on existing properties for sale, with the number of reductions up 2% on last month to 23% of all properties reduced, which is still much lower than the pre-pandemic five-year average of 32%. It is very likely that asking prices will drop in November and December as they normally do, and it will be important to distinguish these seasonal price changes from market changes caused by other factors.
“Though we understand that price forecasts are at the front of mind for many, there are more economic events to play out before we can make a prediction for 2023.”
Tim Bannister, Rightmove’s Director of Property Science, said: “What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues. New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average. It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”
Rightmove reports that the sudden rise in average mortgage interest rates has understandably resulted in some would-be home movers pausing their plans to wait and see how the next few weeks and months transpire.
It reports that overall demand is down by 15% over the last two weeks compared against the same two weeks last year, but it is still 20% up on the more normal market of 2019.
Looking at the various market sectors, it seems that first-time buyers have been hit hardest. Demand in the first-time buyer sector has dropped by 21% in the last two weeks compared against the same two weeks last year, but it is still up 24% compared against the more normal market of 2019.
Those home movers who have already agreed their purchase are not losing their resolve however, with Rightmove reporting that just 3.1% of sales agreed have fallen through in the two weeks following the mini-budget, which is in line with the 3.0% during the same two weeks in 2019. Agents are reporting that those who secured a mortgage offer at a lower rate are rushing to complete on their purchase prior to that lower rate offer expiring.
Tim Bannister said: “The vast majority of buyers who had already agreed their purchase are still going ahead. Some aspiring first-time buyers will have had their plans dashed by the sudden nature of the mortgage rate rises, and now face a difficult situation with rents also rising, and a shortage of available homes to rent. Buyer demand was already starting to soften and higher interest rates were anticipated, but they’ve been brought forward sharply due to market uncertainties. Agents report that many of those who managed to secure a mortgage offer at a lower rate before lenders quickly increased them are now rushing through their agreed deal to avoid their offer expiring and facing a higher rate when they come to reapply. It’s understandable that some new movers who have the option to wait, may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home. With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip supply and supports prices.”
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