UK average asking prices for new sellers decreased marginally by £82 to £372,812 in June, down from £372,894 in May, according to property portal Rightmove. This fall marks the first recorded in June since 2017, following a 1.8% increase in May from April.
Rightmove projects a less encouraging outlook for the remainder of 2023, predicting that house prices will decline in most months in line with seasonal patterns.
The property portal’s current prediction for 2023 anticipates a 2% decrease in UK house prices for the year as a whole. This comes despite a recent uptick in mortgage rates that hasn’t dented buyer demand. Over the past two weeks, demand was reportedly 6% higher than pre-pandemic levels in 2019.
“Agents report that new sellers are sitting in two camps – those who still have overoptimistic price expectations following the buoyant pandemic market, and those who have adapted to the new conditions and are coming to market with a competitive price.
“Sellers who price competitively are much more likely to find a suitable buyer quickly before their home appears stale, and they can often then negotiate on price on any onward purchase,” says Tim Bannister, an analyst at Rightmove.
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, added: “As expected, recent mortgage market turbulence is dampening the increase in prices and activity which we would usually see at this time of year. However, these are, of course, only aspirational, not achieved values.
“On the street, prices are softening as cash and equity-rich buyers in particular continue to hold sway over those relying on increasingly hard-to-obtain loans. Negative publicity is helping lower expectations and encourage more seller realism.”
Tomer Aboody, director of property lender MT Finance, said: “While it seemed a few weeks ago that we might be nearing the ceiling of rates rises, this past month and sentiments have shown that there’s still a way to go.
“The uncertainties, along with rate rises, have inevitably resulted in an insecure situation, with buyers not desperate to pull the trigger since they’re not sure what will happen with mortgage rates and whether they will meet affordability criteria once they come to take out a deal.
“Is it now time to get used to a ‘new world’ of interest rates trending at around 5% to 7%, with buyers expecting and accepting these levels and making the numbers work for their situation, as well as being realistic as to what they can afford?”
Regionally, the North East enjoyed the most significant growth in asking prices in June, with the average property value increasing by 4.9% to £188,414. In stark contrast, London saw prices drop by 1.6%, reducing the average asking price to £685,241.
