Rightmove anticipates a 1% reduction in average new seller asking prices by the end of 2024, reflecting the UK housing market’s shift towards more normal levels of activity post-pandemic.
This expected decrease is attributed to sellers needing to adopt more competitive pricing strategies to attract buyers, especially with mortgage rates likely to remain elevated.
The forecast, based on Rightmove’s extensive market data, suggests that agents will need to intensify efforts to build sales chains, particularly focusing on first-time buyers who are facing stretched affordability. In 2023, the time taken for sellers to find a buyer increased significantly, and sellers who priced competitively found buyers more quickly.
Rightmove’s data indicates a trend of increasing price reductions during marketing, with 39% of properties experiencing a cut in 2023 compared to 29% last year. This trend is expected to continue into 2024, necessitating new sellers to start with competitive pricing.
Despite a steadying of mortgage rates, affordability will continue to challenge many buyers. The market has become more stable, encouraging buyers who withdrew during the volatile period to return, yet the elevated rates compared to historic lows continue to impact budgets.
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Tim Bannister, Rightmove’s property expert, said: “This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties.
“However, it has been a challenging change in mindset for some sellers to transition from the frenzied market of the previous few years. The level of sales being agreed is 10% lower than at this time in the more normal market of 2019, so sellers will need to price even more competitively next year to make sure that they secure a buyer.
“We predict a modest average fall of 1% in new seller asking prices next year. This will be felt more keenly in some areas of Great Britain than others. The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand. In areas with more discretionary sellers and fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.
“In areas where sellers are struggling to attract affordability-stretched buyers or needing to sell quickly due to a change of circumstance, new job opportunity, or strong desire for a lifestyle change, we are likely to see even more competitive pricing.
“An average drop of 1% in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.
“However, the better than anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing and marketing strategy.
“This underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year.”
Jeremy Leaf, a north London estate agent and former RICS residential chairman, added: “This forecast is quite encouraging bearing in mind that Rightmove looks as asking, rather than selling, prices.
“Such a modest change is unlikely to have much bearing on buyers’ intentions one way or the other. Certainly, we have seen over the last month or two activity has remained fairly consistent despite rocketing interest and inflation rates.
“With mortgage payments and the cost of living starting to fall, while wage rises are more than holding their own, this is giving buyers confidence that we are at, or very close to, the bottom and prices are unlikely to change dramatically in the short term at least.
“Looking forward, we don’t expect any significant changes as so many homeowners will have to deal with fixed rate mortgages coming to an end next year, which will inevitably prevent many from making a move.”
