Housing Market Update: Rightmove Reports a 0.2% Dip in Average House Prices

Amelia Earhart
5 Min Read

According to the latest housing price index released by Rightmove, the average price of properties entering the market has experienced a slight decline of £905 (0.2%) this month. Despite this dip, average asking prices still remain 2.6% higher than those recorded in January. Rightmove highlights the persistent resilience of buyer demand, which is currently 3% higher than in July 2019. However, the index also reveals a 12% decrease in the number of available properties for sale compared to four years ago, indicating the impact of Bank of England rate rises.

The housing market in the UK has seen a minor setback as the average price of properties listed for sale has dropped by £905 (0.2%) this month, according to the latest housing price index from Rightmove. Although average asking prices remain 2.6% higher than at the beginning of the year, the decline suggests a shift in market dynamics.

Rightmove reports that buyer demand continues to display resilience, surpassing July 2019 levels by 3%. However, the availability of properties for sale has decreased by 12% compared to four years ago, showcasing the effects of recent Bank of England rate increases.

Despite these challenges, Rightmove emphasizes that attractively priced homes are still drawing motivated buyers due to the scarcity of properties on the market. Tim Bannister, the director of property science at Rightmove, acknowledges that the interest-rate measures implemented to slow down the economy are now impacting the housing market.

Bannister further explains that although prices and sales rebounded more strongly than expected earlier this year, the unexpected persistence of inflation figures and additional mortgage rate hikes have contributed to the recent decline in prices and the number of agreed sales. Nonetheless, first-time buyers, as well as those looking to upgrade or downsize with higher deposits and lower mortgage requirements, continue to actively search for properties they can afford and are not overpriced.

The housing price index indicates that the mid-market second-stepper sector and the top-of-the-ladder sector have been most affected by the decrease in agreed sales. In June, these sectors recorded a 14% decline compared to 2019 levels. Conversely, the smaller home market segment, consisting of two-bedroom properties or fewer, experienced a smaller impact, with sales agreed in June down by only 9% compared to 2019.

Rightmove suggests that this resilience in the typical first-time buyer sector throughout the first half of the year demonstrates the determination of many aspiring homeowners to navigate the uncertain mortgage market and make their way onto the property ladder.

Bannister adds that some individuals are delaying their moves until there is more certainty surrounding mortgage rates and are evaluating the impact of higher costs on their plans. However, a substantial number of motivated buyers, who have factored in potential rate rises in their budgets, continue to inquire about available properties, ensuring that the market remains active.

Tomer Aboody, director of property lender MT Finance, explains that rising interest rates have negatively affected affordability, leading to a decrease in prospective buyers. Consequently, transaction levels and pricing are witnessing a decline as sellers hesitate to list their properties due to fears of receiving lower-than-expected prices.

Jeremy Leaf, a former residential chairman of RICS and an estate agent in North London, agrees with the figures presented by Rightmove, stating that they align with his own observations. Leaf notes that although there are still cash or equity-rich buyers in the market, they are taking their time to view the gradually increasing inventory of properties. After conducting thorough stress tests, these buyers often make offers that can be considered bold. On the other hand, most sellers are not yet willing to accept significant discounts, at least for the time being.

In conclusion, while the housing market has experienced a minor decline in average house prices, it continues to demonstrate resilience driven by motivated buyers and limited property supply. The impact of Bank of England rate rises and affordability concerns have contributed to the recent dip, prompting some buyers to postpone their plans. However, first-time buyers remain determined to enter the market, navigating the uncertainties of the mortgage landscape. Sellers, for now, are holding firm on prices, creating a dynamic where buyers are seeking opportunities while sellers exercise caution.

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Amelia Earhart, an accomplished news reporter, and writer, brings a flair for storytelling and sharp journalistic insight to her work. As a valued contributor to Marketresearchrecord.com, she delivers timely news and analysis on various industries. Amelia's dedication to accuracy and her adventurous spirit drive her to uncover impactful stories, leaving a lasting impression on her readers. With years of experience in journalism, she remains committed to journalistic integrity, informing and inspiring a wide audience in the dynamic world of media.
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