The average new seller house asking price rose in the month to October 7 by the smallest amount since the same time in 2008.
According to the latest Rightmove House Price Index, the average asking price rose by just 0.5% to £368,231, which was significantly below the historic October norm of 1.4%.
The number of sales agreed were also 17% lower than this time last year and Rightmove said that sellers who struggle to adjust their asking price accordingly are finding their homes left on the shelf.
Despite the increase, the report also shows that buyers are still active in the market, with the number of enquiries for each available home 8% higher than during the more normal market conditions of 2019.
The report’s regional breakdown shows that the largest house price increase in that period to October 7 was in London at 2.1%, rising to £687,401, followed by the South-East at 1% (£486,886). The largest fall in average price was in Scotland and the North-West at -1.5% each.
Rightmove director of property scienceTim Bannister said: “New seller asking prices have seen a rise, as they usually do at this time of year following the summer holiday season. While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market, where six in 10 homes are now selling rather than eight in 10.
“In a market that agents describe as the most price-sensitive ever, buyers are likely to be on the lookout for homes that they feel represent excellent value, and to attract one of these motivated buyers, sellers need to price right first time. If similar nearby properties for sale appear overpriced, serious sellers have an opportunity to stand out from the crowd with a more competitive price and attract immediate buyer interest that our research shows significantly increases the likelihood of finding a buyer.”
Commenting on the figures, Cornerstone Group International chairman David Hannah said: “In the wake of Rightmove’s latest data, it’s evident that the UK’s property market is facing unprecedented challenges. The marginal increase in asking prices, the sharpest drop in annual house prices in 14 years, and a significant decline in house sales all underscore the current turbulence in the market.”
Hannah blames mortgage price hikes for this. The Bank of England (BoE) raised interest rates 14 consecutive times until last month as it tried to tame inflation, and while it has been paused at 5.52%, it is still the highest rate since the financial crisis of 2008.
Hannah added: “The primary culprit for this downturn lies in the relentless interest rate hikes by The Bank of England, which have driven mortgage costs to alarming heights. The repercussions of this financial upheaval extend far beyond the housing sector, impacting the broader economy and the financial stability of many individuals. It’s a sobering reminder of the delicate balance that exists in our economy and the need for prudent financial management in these challenging times.”