The average home price witnessed a decline of 1.9% in August, marking the most substantial dip for the month since 2018.
This downward trajectory follows a period of rising mortgage rates, prompting homeowners to reduce their property prices to facilitate quicker sales.
Towards the conclusion of the summer season, the average cost of a home decreased by £7,012, settling at £364,000, as indicated by data from estate agent Rightmove. Consequently, the current asking price has slipped by 2% from its zenith in May.
In London, the housing market experienced a more pronounced downturn, with house prices receding by 2.3%. The average home price in London now stands at £672,000.
Overall the number of home sales was down 15% compared with 2019, before the pandemic.
Sales of homes typically for first-time buyers fell by a less severe 10%, reflecting a 12% jump in rents over the past year.
Reaction
Jeremy Leaf, North London estate agent and a former RICS residential chairman:
“Despite a larger-than-expected drop in aspirational asking prices as opposed to selling prices, in many cases this hasn’t generated an increase in sales agreed, which remain disappointingly low.
“On the ground, we’re seeing a similar picture. Realistically-priced properties are still selling relatively quickly particularly to ‘cash’ or equity-rich buyers whereas those requiring reductions to attract more attention are sticking.
“Certainly, continuing strong employment and slightly more stable mortgage rates are helping to revive interest despite holiday distractions.”
Tomer Aboody, director of property lender MT Finance:
“As affordability continues to be a huge strain on buyers, the lack of stock on the market is proving another stumbling block for would-be property purchasers.
“Although stock levels have improved slightly on last year, they are still below pre-pandemic levels, resulting in competition for the best properties at the correct price.
“Hopefully, some market stability establishes itself soon, which in turn should bring some confidence and further stock to tempt buyers.”
Nathan Emerson, Propertymark CEO, said:
“The sales market remains buoyant despite rising mortgage rates with our member agents reporting that the number of sales agreed last month was broadly in line with what was reported during the busy market period during the same time last year.
“We also know that the number of viewings and valuations being conducted have dropped, indicating a shift to only the more serious homebuyers and sellers remaining proactive in the market.
“Those properties that are currently for sale with motivated vendors in line with the market are selling quickly. In July, 81% of our members reported that most of their sales were below asking price, meaning buyers are now able to negotiate and secure a property at a reasonable price, playing a part in combatting rises in mortgage rates.”
