The average price of property coming to the market fell by 2.1% in December, according to the latest house price data from property platform Rightmove.
The average price of a property now stands at £359,137, down from £366,999 in November.
Despite the decline, it is worth remembering that these figures are still 5.6% higher than a year ago. That being said it is bigger than usual for this time of year.
Tim Bannister, director of property science at Rightmove, said: “Though we would always expect prices to drop in December, as motivated sellers try to capture the attention of a buyer before Christmas with a competitive price, this monthly dip is the largest we’ve seen for four years.
“It’s an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October before things began to settle down. Despite this, we end the year with average asking price growth of 5.6%.”
Bannister added that the platform expects average asking prices to fall by 2% next year as normality returns to the market.
Marc von Grundherr, director of Benham and Reeves, said that while the decline was significant, it could be reversed as market sentiment is restored.
He said: “The wheels may seem to be coming off the UK property market with this, the biggest fall in home asking prices that we’ve seen in quite a while.
“But we must remember that this index is one that reflects sellers’ asking prices and much of this angst is sentiment related and may well be restored as we begin to see the peak of inflation and interest rates. In other words, this is a reaction to the prospect of a property market decline rather than a decline in itself, albeit we are in danger of that becoming a self-fulfilling prophecy if we are not careful.”
While James Forrester, managing director of Barrows and Forrester, said the decline represents a realignment between buyer and seller expectations: “The silver lining in the cloud here is that sellers are responding to signals that buyers are demanding lower prices and are prepared to sit things out whilst the market adjusts to recent economic woes.
“The fact that those that are selling have re-thought their asking prices in line with buyers’ lower expectations is at least a good thing for estate agents in that this means the gap between buyers’ and sellers’ pricing is now narrower and deals will still be struck accordingly.”
Iain Crawford, CEO of Alliance, added that the current market situation could be seen as an opportunity for some: “Don’t panic Mr Manwaring. Those that understand markets know that cyclicality always prevails.
“Any asset goes in both upward and downward directions and the current dynamic is surely an adjustment, yet over the long term, we all know that property is a safe investment.
“Some of us will see the current market decline as an opportunity rather than a problem.”
