Rightmove: property prices drop

This comes despite the current weight of financial uncertainty pressing down on the market. 

The proportion of properties seeing a reduction is only slightly up on pre-pandemic levels, though a slowdown in activity from last year’s frenetic market has led more sellers to be willing to reduce their asking price to agree a quicker sale. 

Buyer demand is still up by 4% on the more normal market of 2019, but down by 20% on October last year. 

First-time buyer properties continue to be the most affected sector, with year-on-year demand down by 26% in October, while second stepper demand is down by 17%, and top of the ladder is down by 15%. 

The era of historically low interest rates is over, but there are signs that mortgage rates and availability are now settling down. 

The average price of newly-marketed homes dips by 1.1% this month (-£4,159) to £366,999. As is usual in November, sellers are pricing more competitively to try to find a buyer in the last months of the year.  

This monthly price drop is exactly in line with the average 1.1% that Rightmove recorded in November during the pre-pandemic years of 2015 to 2019, and so should not be regarded in isolation as a negative indicator.

However, there are signs that more existing sellers, whose properties were already on the market and unsold, are willing to take their agents’ recommendations and reduce their prices to achieve a quicker sale.  

The proportion of unsold properties seeing a price reduction has increased only slightly from the pre-pandemic 7.5% in October 2019 to 8% this October. However, it has doubled from the figure of 4% in the frenzied market of October 2021.  

Buyer demand is still performing better than it was during the more normal market of 2019, but we have returned to a much more price-sensitive housing market after two years of a buying frenzy. 

Tim Bannister Rightmove’s director of property science had this to say: “The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain, but what is certain is that the exceptional price growth of the last two years is unsustainable against the economic headwinds and growing affordability constraints

“Home-owners who come to market in the final few months of the year tend to price lower to attract buyers in the lead-up to Christmas, and we are hearing from agents that both existing and new sellers understand that to sell in the current market they need to price competitively.  

“During the market frenzy many agents said that they had to rip up the rule-book on valuing properties due to bidding wars, but now they are back in more familiar territory, and pricing right first time is even more critical to securing a quick sale.”