Property asking prices increase by £1,950 in October, smallest rise since 2008
According to the latest analysis from Rightmove, property asking prices in the UK have increased by an average of £1,950 this month. Although this is a typical rise for this time of year, October’s increase of 0.5% is the smallest since 2008. Over the past 20 years, the average increase at this time of year has been 1.4%. However, despite the rise in asking prices, the number of sales agreed is 17% below last year’s levels, as buyers adopt a cautious “wait and see” approach.
The average asking price for new October listings on Rightmove is currently £368,231. However, this figure may be significantly higher than the final selling prices of homes. Rightmove’s data shows that 37% of all listings on its site this year have had their asking prices reduced. On average, homes are selling at a 4% discount from their final asking prices.
While newly listed asking prices are only 0.8% lower than last year, transaction levels have taken a hit. The number of sales agreed is 17% below last year’s levels, according to Rightmove. Sellers who are not willing to lower their asking prices to match the current market activity are finding it difficult to sell their homes.
High asking prices causing slower sales
Despite the increase in asking prices, agents report that many properties are being priced too high, resulting in the need for price reductions. Ben Gee, founder at Hat and Home estate agents in Berkshire, explains that many buyers are adopting a “wait and see” approach, leading to a slowdown in sales. He suggests that sellers should price their homes more competitively to attract buyers.
Rightmove’s data shows that properties priced competitively are 60% more likely to find a buyer on the first day of marketing. In addition, these properties sell in less time and have a lower chance of falling through. This suggests that sellers should be cautious about testing higher prices, as it may damage their chances of a sale.
Buyers seeking value despite higher mortgage rates
Despite higher mortgage rates compared to 2019, the number of buyers enquiring about each available home for sale is 8% higher, according to Rightmove. This indicates that buyers are still active in the market, but are looking for homes that offer excellent value. Rightmove’s Tim Bannister advises sellers to price their homes right from the start to attract motivated buyers.
Moreover, mortgage rates have been dropping over the past 11 weeks, improving buyer affordability. However, the rates for those with smaller deposits have not dropped as quickly as those with larger deposits. Nonetheless, the more stable mortgage market gives movers more assurance over the rates they are likely to be offered.
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