Rightmove reports a slight decrease in the average price of newly-listed homes on the market. This month, these properties are priced approximately £900 or 0.2% lower compared to the usual stability of 0.0% during this season.Â
New sellers are adjusting their price expectations due to recent increases in the Base Rate and growing limitations on buyer affordability. Despite this, price trends have been surprisingly robust throughout the first half of the year, with average asking prices remaining approximately 2.6% higher than in January, according to the portal’s findings.Â
However, the measures implemented by the Bank of England to control inflation are having an impact on the economy. The number of sales agreed in June is now 12% lower compared to the more typical market level seen in 2019, in contrast to the surprisingly strong performance in the first five months of this year.
Nevertheless, buyer demand remains resilient, with a 3.0% increase compared to the same period in 2019. Estate agents are reporting that appropriately priced homes are still attracting motivated buyers due to the scarcity of properties available for sale when compared to historical standards.
However, transaction volumes have been affected. The number of sales agreed in June within the mid-market “second-stepper” segment and the affluent “top-of-the-ladder” segment are 14% lower than the levels seen in 2019. Rightmove suggests that some individuals in these sectors who are upgrading their homes and significantly increasing their mortgage may be reconsidering their budgets, waiting to observe the direction in which mortgage rates will move in the coming months.
The impact on the smaller housing market, consisting of properties with two bedrooms or fewer, has been relatively minimal. The number of sales agreed in June for this segment is 9.0% lower compared to 2019. Throughout the first half of the year, this particular sector, which primarily caters to first-time buyers, has demonstrated remarkable resilience. It reflects the determination of many first-time buyers to navigate the uncertain mortgage market and enter the property market, especially considering the high rental prices.
Additionally, this trend suggests that some individuals are choosing early retirement and downsizing to smaller properties. This decision may be driven by various factors, such as accessing equity from their homes for lifestyle or early retirement purposes or providing a deposit for family members who are first-time buyers.
Despite the slight decline in sales levels, there is no surplus of available properties to choose from. The number of properties for sale is 12% lower compared to the same period in 2019, indicating a limited supply in the market, according to the portal’s data.
Estate agents are observing that, despite the challenges in the market, homes that are appropriately priced based on local market conditions continue to generate significant interest from eager buyers who are looking to move. However, the latest research from Rightmove emphasizes the risks associated with sellers initially setting prices too high, which can significantly hinder their prospects of finding a buyer.
The study reveals that properties requiring a reduction in their asking price are more than 10% less likely to attract a buyer compared to those that were initially priced correctly. Given the already lower chances of selling due to prevailing market conditions, over-pricing from the outset further diminishes these prospects.
According to Rightmove spokesperson Tim Bannister, “Sellers who establish the right price from the beginning, rather than starting with an excessively high asking price and later reducing it, have a much better chance of attracting motivated buyers. A reliable local agent can provide sellers with accurate evidence of achieved prices in their area.”
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