Rightmove’s latest house price index (HPI) found that the average new seller asking price rose by just 0.3% (£1,199) this month to £371,958, significantly lower than the typical seasonal increase of 1.3% at this time of year.
Market activity remained strong, but the modest price increase reflected rising buyer choice and competition among sellers.
The number of sales agreed was up by 29% year-on-year, indicating a strong recovery from last year’s weaker market.
Buyer demand remains robust, with inquiries to agents up by 17% compared to last year despite some uncertainty due to the Autumn Budget.
The number of available homes for sale was 12% higher than a year ago and at its highest per estate agent since 2014, increasing competition for affordability-stretched buyers.
While the outlook for 2025 was positive, affordability pressures persisted.
The average 5-year fixed mortgage rate increased to 4.61%, up from 4.55%, marking the first rise since May.
The average annual energy bill for a home with an EPC rating of D has risen by 10% since September to £2,465.
Financial markets predict two Bank Rate cuts before the end of the year; with wage growth outpacing house price increases, affordability may improve in 2025.
The average price of properties coming to the market rose by 0.3% (£1,199) to £371,958, which is a lower increase than the historical average for October.
According to Rightmove, the muted price bounce was due to an increase in buyer choice that had not been seen for a decade, giving buyers more negotiating power and keeping prices stable.
The snapshot of sales activity shows that sales were 29% ahead of the same period last year, reflecting an upward trend.
Competition was particularly intense for larger homes, with four-bedroom detached and five-bedroom-plus properties seeing a 17% increase in availability.
Reaction:
Chris Little, chief revenue officer at finova:
“Today’s data is another positive sign that the market is recovering, albeit slowly.
“With sub-5% mortgage rates becoming more popular, and potential interest rate cuts on the horizon, homebuyer confidence is rising, and we’ll likely see modest price growth through year-end.
“Sellers may also be rushing to list properties before the Autumn Budget, in an effort to avoid the brunt of potential tax hikes, buoying activity in the coming months.
“That being said, affordability remains a challenge for many, and our hope is that the ongoing rate war should offer more attractive deals that can go some way to ease these concerns.
“Both lenders and brokers must stay ahead of the curve to meet borrowers’ evolving financial needs, especially if we see a surge in buyer motivation before we close out the year.
“Many financial institutions are already turning to technology to streamline services, and by investing in digital tools now, lenders can offer personalised, competitive rates all while managing their own risk.
“Real-time pricing gives lenders an edge, enabling them to provide tailored solutions that align with each borrower’s unique situation when they need it most.”
Tomer Aboody, director of specialist lender MT Finance:
“As a greater volume of properties come up for sale, this is creating a buyers’ market with those who can afford to buy having increased choice, enabling them to negotiate a better price.
“This, in turn, is leading to a slowdown in growth in asking prices.
“Even with the uncertainty around the Budget lingering in the background, many buyers are still choosing to take the plunge, not knowing whether whatever the Chancellor announces could end up reducing their ability to buy if the markets react badly.
“Further rate cuts are expected before the end of the year though, so even with a painful Budget, we could see a strong end to 2024.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“There’s no question the market has changed considerably since last summer.
“Interest rate and political uncertainty has been replaced by steadily falling mortgage costs and more stable Government.
“As a result, buyer and seller sentiment, which is of course is so crucial to activity, has improved.
“However, over-supply of stock in some areas and price ranges, as well as worries about the contents of the forthcoming Autumn Statement, has increased caution, deferred decision-making and kept prices in check.
“Looking forward, we expect there will be a modest bounce back if the Chancellor’s announcements prove to be less damaging than many fear.”
