The average price of property coming to the market for sale dropped by 1.4%, marking a -£5,366 decrease to £366,592, data from Rightmove’s November House Price Index has revealed.
This is the second month in a row that new seller pricing has fallen more than the norm, with the usual drop seen at this time of year being 0.8%.
The Index found that last month’s pre-Budget jitters have turned into post-Budget disappointment, creating new challenges for the housing market, and appear to have caused a larger-than-normal seasonal slowdown in pricing as we head towards Christmas.
However, despite the dampener of the Budget, the big picture of market activity remains strong when compared with last year.
Since the Budget, the Bank of England’s second Base Rate cut has sparked early signs of a boost in buyer activity.
Indeed, with strong market metrics compared with last year and optimism for lower mortgage rates in 2025, Rightmove has now forecasted a 4% increase in average new seller asking prices next year.
Tim Bannister, Rightmove’s director of property science, said: “There’s been a lot of news to digest for home-movers over the last few weeks and it appears that the market may still be chewing it over.
“We had been seeing a drop-off in buyer demand, both in the lead-up to the Budget and in its immediate aftermath, as it was confirmed that there will be an increase to Stamp Duty charges for most home-movers and second-home buyers, and some first-time buyers.
“However, a second Bank Rate cut and a boost of optimism regarding 2025 appear to have reversed this trend at least temporarily.
“Zooming out of these short-term trends, the big picture of market activity remains positive when compared to the quieter market at this time last year.
“This sets us up for what we predict will be a stronger 2025 in both prices and number of homes sold, particularly if mortgage rates fall by enough to significantly improve affordability for more of the mass-market.”
Reaction:
Kevin Shaw, national sales managing director at Leaders Romans Group:
“Since the Budget and subsequent interest rate drop, there has been no obvious spike in sales numbers, although there has been a slight uptick in demand.
“Decisions are being made now before the buildup to Christmas, as buyers are more likely to get price flexibility from sellers now rather than in the New Year.
“This presents a good opportunity to negotiate, as there will certainly be more people looking in January after the Christmas break and usual surge in enquiries on Boxing Day.
“There is some uncertainty following hikes in National Insurance and the minimum wage. There has been a lot of change in the last couple of weeks, so I think time will tell.
“It’s definitely an interesting time in the market but as we go into 2025 we expect market sentiment to improve further.”
Alastair Cochrane, group sales and operations director at Stirling Ackroyd:
“Now is a good time to list, as most people traditionally hold off at this time of year from coming to market, believing that buyer activity is lower.
“Committed buyers are still offering and purchasing, and for some sellers who have a property that could attract a first-time buyer, the window of opportunity is closing for them to use the stamp duty relief, so now would be a good time to take action.
“For investors, the increased Stamp Duty does present an initial barrier, and maybe those considering an investment property will recalibrate offer prices to take into account additional costs.
“Overall yields have increased with rising rents, which should give investors some comfort despite increases in Stamp Duty.”
Alex Caddy, manager at Clarkes Estate and Letting Agency:
“We have seen a few flashes of greater market activity, largely stemming from first time buyers, however overall, we’re seeing activity tail off before Christmas.
“This time of year does see some sellers taking a break from the market which gives an opportunity for those who persevere, as the amount of choice decreases for those active buyers.
“We have two camps of sellers at the moment – those without time pressure are holding fast with their asking prices, while others who reduce their price to attract a buyer more swiftly have more luck once they find a competitive price point.
“There are still many sellers planning their moves who are out looking despite not yet having a buyer themselves.
“There is certainly optimism that as first-time buyer activity picks up, this will create the much-needed knock-on effect to kick-start next year.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Although these are asking, rather than selling, prices, this month’s larger-than-usual drop confirms what we are seeing in our offices.
“There is more demand and sales agreed are up too but the increase in listings means buyers are spoilt for choice so sellers must be competitive if they want to stand out from the crowd.
“The Budget did not do the housing market any favours and may even extend the cautious tone as measures announced will probably mean mortgage rates remain higher for longer.
“On a slightly more positive note, first-time buyers are trying to snap up properties at better prices which investors decide against due to higher Stamp Duty, before the lower rates which apply to them disappear next April.”
Tomer Aboody, director of specialist lender MT Finance:
“More activity is leading to slower growth in asking prices, as buyers are in a stronger position with more stock available for sale.
“We are seeing some further push forward from the market with regard to mortgage rates, helped by the latest bank rate reduction, although further cuts might be slower in coming.
“While the Budget is now done, the market has yet to properly respond but in the short term as lenders continue to provide more affordable mortgages, we should continue to see the uplift in the market.
“As we stand now, if you’re looking to sell, price sensibly and attractively, chances are the buyer will be there.”
Nathan Emerson, CEO of Propertymark:
“The Bank of England’s recent cuts to interest rates are likely to spur on more movement and further stimulate the market.
“With many buyers in England and Northern Ireland looking to move quickly before the Stamp Duty rises in April, we could see more people willing to accept heavier negotiations than normal, which could result in a small dip in the average house price.
“With the potential of a rise in the volume of transactions on the horizon, we would anticipate a spiked shift towards the improvement of the overall health of the economy.”
Chris Little, chief revenue officer at finova:
“Although today’s data saw house prices dip, these fluctuations are to be expected. And the complexity surrounding mortgage rates is impacting market conditions, too.
“A declining base rate doesn’t always translate directly to lower mortgage rates as lenders weigh the impact of the recent Budget and other global events.
“The potential for higher US tariffs could also cloud the outlook for next year, but for the time being, there are still several competitive rates on the market.
“The government’s recent measures in the Autumn Budget designed to support the housing market, such as the reintroduction of the mortgage guarantee scheme, are gradually reviving homebuyer confidence.
“Wage growth and stabilising energy bills are helping fuel this recovery, with higher wages easing affordability challenges while lower energy costs are lightening household budgets.
“However, the age-old issue of housing shortages means that buyers are continuing to err on the side of caution, and the path to market stability is far from straightforward.
“As we approach the end of 2024, lenders have a crucial role to play by offering competitive rates and flexible mortgage products.
“Both lenders and brokers need to focus on providing tailored, effective solutions that truly meet clients’ needs, and be ready to support buyers who are prepared to step onto the housing ladder, even if others are holding off for now.
“With a potential uptick in buyer motivation as the new year approaches, now is the time to fine-tune their offerings.”
