The average price tag on a home tumbled by nearly £7,000 in December, according to a property website.
Across Britain, the average asking price for a home coming on the market fell by 1.9 per cent or £6,966 in cash terms this month, reaching £355,177, Rightmove said.
In November, the average asking price was £362,143.
Rightmove said that prices tend to fall in December, as Christmas approaches.
We entered this year under a cloud of uncertainty— Tim Bannister, Rightmove
But this month’s drop is bigger than the past 20-year average of 1.5 per cent, as sellers look to price attractively to secure a deal.
The fall is partly driven by more new sellers looking to price below the competition now that the pendulum has swung towards a buyers’ market, Rightmove said.
On Friday last week, financial information website Moneyfactscompare.co.uk reported that the average two-year fixed-rate homeowner mortgage on the market had fallen below 6 per cent, for the first time in nearly six months.
Some commentators have suggested that this could help bring more activity back into the housing market.
Tim Bannister, Rightmove’s director of property science, said: “Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively.
“We entered this year under a cloud of uncertainty, as the fallout from the autumn mini-budget filtered through to lower activity levels. High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year.
“However, for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1 per cent in asking prices highlights the market’s much-better-than-predicted resilience this year.”
The number of sales agreed in the year to date is 13 per cent behind the same period last year, according to Rightmove.
It said this is a better-than-expected figure, given that the 2022 market was much more frenetic, and three of the 10 strongest months on its records for buyer demand happened in the first half of that year.
While, across Britain, asking prices have fallen by 1.1 per cent compared with last year, there is a mixed picture geographically, highlighting the need for sellers to price in line with their local market trends, the website said.
Rightmove also said it is seeing early signs of more activity in the family mover market, although it added that first-time buyers will also be needed to keep the market moving and form the bottom of chains.
The website predicts that average asking prices will drop by 1 per cent across Britain in 2024.
Our advice to both buyers and sellers is to be realistic with expectations, it is potentially an easier market for buyers in prime areas with more choice and less pressure— Josephine Ashby, John Bray Estate Agents
Mr Bannister added: “With mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year. Indeed, there’s always a big post-Christmas upturn in Rightmove traffic, with early-bird buyers starting their search on Boxing Day.”
Josephine Ashby, managing partner of John Bray Estate Agents in Rock, Cornwall, said: “Very prime coastal property has held firm and sold well and sensible sellers who are realistic about guide prices are achieving positive results.”
She added: “Our advice to both buyers and sellers is to be realistic with expectations, it is potentially an easier market for buyers in prime areas with more choice and less pressure. Vendors; get organized, take early interest seriously and above all pitch values at an attractive level from the outset.”
Rightmove’s report was released as a separate index, from estate agent Hamptons, and indicated that rental prices on new private tenancies increased by 10.2 per cent year-on-year across Britain last month, marking the strongest growth recorded in any November since Hamptons’ records started in 2014.
The average rent on a newly-let home in Britain rose to £1,348 per month in November, up by 10.2 per cent or £125 in cash terms per month compared with November last year, Hamptons said.
Aneisha Beveridge, head of research at Hamptons, said: “Higher interest rates in the medium term are likely to mean more Millennials rent for longer.”
Hamptons’ report uses data from the Countrywide Group to track changes to the cost of renting. The index is based on the 90,000 homes let and managed by Countrywide each year and is based on rents achieved rather than advertised rents.
