Asking prices for newly listed homes have fallen by 1.7% in November according to Rightmove and although prices usually drop at this time of year, as sellers price competitively to attract buyers before Christmas, this is the biggest November drop since 2018 according to the property website.
The drop equates to £6,088 meaning the average asking price for a UK property now stands at £362,143, as more sellers heed their estate agents’ advice to price right the first time and temper their expectations in a less frenetic market.
The data also points to a better-than-predicted year so far, with available properties for sale now just 1% behind 2019’s more normal market levels, and sales agreed improving this month to 10% below November 2019’s level, from 15% below last month.
Patrick McCutcheon, head of residential said: “Serious sellers know they need to price competitively in November, with all the Christmas distractions on the horizon, so prices easing at this time of year isn’t that unusual. In addition, most sellers recognise that potential buyers are compromised by higher mortgage rates and are also taking this into account when deciding where to price their homes.
“However, this week’s news that inflation has fallen to 4.6%, its lowest level in two years, is clearly welcome news for the housing market and strengthens hopes that the Bank of England base rate increases have peaked and will come down in 2024. Already lenders are offering far more competitive borrowing rates, which combined with a broader supply of property, should lead to a healthier marketplace by spring 2024.
“Ultimately though, Yorkshire’s property market remains resilient and throughout 2023 we have sold properties across all price bands at a steady pace, with healthy activity in the sub £600,000 sector and the upper levels being a little more cautious. Accurate pricing is key to securing a buyer and this is where a local estate agent with a thorough understanding of the local market can make all the difference.”
Tim Bannister, Rightmove’s director of property science, commented: “We’d expect to see a drop in new seller asking prices in the last couple of months of the year, as serious sellers start to separate themselves from discretionary sellers and cut through the Christmas noise with an attractive price to secure a buyer.
“However, the larger than usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition. Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates. It now looks like more sellers are understanding Rightmove’s research; that the chances of securing a buyer are much greater if they price right the first time, rather than over-pricing and reducing their price later.
“This year has brought many new challenges for buyers, sellers and agents to navigate. While there have been many twists and turns, and there are still seven weeks left of the year, the data indicates that there has been more to be positive about in 2023 than many thought there would be at this time last year.”