Rightmove House Price Index: Prices fall though likely more due to holidays than rate rises

Love or Hate Rightmove
  • Price of property coming to the market sees first fall this year, down 1.3% in the month to £365,173 (-£4,795):
    • Prices usually drop in August, and this 1.3% drop is on a par with the average August drop over the past ten years
    • Summer holidays are taking priority and some new sellers are pricing more competitively to secure a buyer quickly, to beat the lengthy average time to completion and move home before Christmas
  • Demand continues to soften and supply constraints are improving, but there is still a massive imbalance:
    • Buyer enquiries to agents are down 4% on the hot market of 2021, but remain 20% higher than 2019
    • New listings are up by 12% on the same period last year, but are still 6% down on 2019, while available stock is down 39% on 2019
  • Latest interest rate rise of 0.5% is putting further pressure on buyer affordability:
    • Average monthly mortgage payments for new first-time buyers putting down a 10% deposit exceed £1,000 for the first time
  • August marks  20 years of Rightmove’s House Price Index, with national average asking prices more than doubling in those 20 years (+134%), from £155,994 to £365,173, outstripping both salaries and general inflation

 

The average price of property coming to market drops by 1.3% this month (-£4,795) to £365,173. This is the first price fall of the year, though traditionally prices do fall in August, and this drop is on a par with the average of 1.3% over the last ten years. As the school holidays arrive, distracted home-movers, especially those in higher-priced homes, appear to be putting their plans on hold until the autumn moving season. Some of the more urgent sellers who are coming to market are pricing more competitively in order to capture the attention of a suitable buyer quickly and attempt to beat the average time of 136 days to complete a sale and move before Christmas. This month also marks 20 years since the first Rightmove House Price Index was published. It is the largest and most up-to-date monthly sample of residential property prices, and since it began national average asking prices have more than doubled (+134%) from £155,994 to £365,173. Average salaries have grown by 76% and the Retail Price Index has increased by 93% in the same period, so house prices have been outstripping both salaries and general inflation over those 20 years.

 

“A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays. Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic. Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home. To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and a half months. Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end year at around 7% annual growth, even with the wider economic uncertainty.”

 

Tim Bannister Rightmove’s Director of Property Science

 

The sixth consecutive interest rate rise, this time by 0.5% to 1.75%, will no doubt be in the minds of many would-be home-movers. Together with the rising cost of living, it will lead to re-considerations of what they can afford to borrow and repay each month. Right now, the mismatch between supply and demand is still the biggest factor influencing asking prices outside of seasonal trends. Although demand continues to soften, and supply constraints are improving, there is still a massive imbalance. Buyer demand this month is down 4% on the frenzied market of 2021, but is still 20% higher than in 2019. The number of new listings coming to market is up 12% on the same period last year, though it is 6% down on 2019, while available homes for sale are down 39% on 2019. Buyer enquiries to agents do not appear to have been particularly dented by the most recent interest rate rise, suggesting that many buyers are still committed to moving, and incorporating rate rises into their financial planning.

 

A combination of rising house prices and interest rates means that average monthly mortgage payments for new first-time buyers putting down a 10% deposit have now exceeded £1,000 for the first time, to reach £1,032. This is 27% higher than at the start of the year. Despite this challenge, demand for properties in the typical first-time buyer sector is 32% higher than at this time in 2019.

 

“Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years. It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move. Demand has eased a degree and there is now more choice for buyers, but the two remain at odds and the size of this imbalance will prevent major price falls this year. For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month.”

 

Tim Bannister Rightmove’s Director of Property Science

Rightmove

UK Property news updates shared directly from Rightmove PLC - the country's leading property portal.

You May Also Enjoy

Breaking News

Freehold and Leasehold Reform Act-lessees can control their own destiny

Matthew Pennycock, Minister of State for Housing and Planning, has made a Parliamentary Statement regarding the future progress of the Freehold and Leasehold Reform Act 2024. The Government have formally recognised the “significant complexity of the task” and that the legislation was rushed in at the end of the last parliament and as a result…
Read More
Rightmove logo
Breaking News

Rightmove’s weekly mortgage tracker 22/11/24

The current average asking price of a typical first-time buyer property is £225,340. For someone taking out an average five-year fixed, 85% LTV mortgage, the average monthly mortgage repayment on this type of home is now £1,104 per month if repaying over 25 years, compared with £1,138 per month a year ago (when the average first-time buyer property asking price was…
Read More
Estate Agent Talk

The Architecture Of Attention Behind Social Media Addiction

In the digital age, social media platforms have revolutionized how we connect, share, and consume information. Behind their sleek interfaces lies a sophisticated architecture of persuasive technology.  These platforms employ intricate design patterns and technical elements to capture and hold user attention. From subtle visual cues to complex algorithmic systems, every feature serves a calculated…
Read More
Breaking News

2025 Predictions for the Private Rental Sector

Allison Thompson, National Lettings Managing Director, Leaders Romans Group (LRG) “As we approach 2025, the lettings industry is entering a phase marked by stabilisation and opportunity. Rental inflation has slowed to an average of 3-4% for new lets, reflecting the effects of affordability constraints; renters’ budgets are beginning to limit how much rents can rise.…
Read More
Breaking News

Response to Matthew Pennycook’s Statement on Leasehold Reform

Yesterday, Secretary of State Matthew Pennycook made a Ministerial Statement on the future of leasehold reform. Responding, Mark Chick, director of ALEP and a Partner at Bishop & Sewell LLP said: ALEP welcomes the ministerial statement which puts in place a timeframe and some objectives for the implementation of the Leasehold & Freehold Reform Act.…
Read More
Estate Agent Talk

Essential Garage Storage Solutions for Small Spaces

Maximize your garage space with practical storage ideas that keep your items organized and accessible. If you’re dealing with a smaller garage, smart solutions can make a big difference in keeping your space neat and usable. 1.  Wall-Mounted Storage Wall-mounted storage is an excellent way to save space and keep your garage organized, especially in…
Read More