Reduction in house prices has not picked up speed
(Picture: Daniel Lynch)The average price of a property coming to market has increased by 0.9% in October up £3,398 to a record £371,158, as shortages of property for sale continued to underpin prices.
According to property website Rightmove given the market uncertainty that followed the Government’s mini-budget at the end of last month, a new asking price record may “seem surprising”, but “it will take time for any impact to filter through to house prices”.
The property specialist said there is also “little sign of downwards price pressure on existing properties for sale”.
“What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget.
“There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues,” said Tim Bannister, Rightmove director of property science.
Rightmove said that it is likely that asking prices will drop in November and December “as they normally do”, but it would be important to distinguish these seasonal price changes from market changes caused by other factors and that there would be more economic events to play out before it could make predictions for next year.
“New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average. It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment,” Bannister said.
Despite banks and other mortgage lenders raising interest rates, following a climbing base rate from the Bank of England that shows no sign of abating in the near future, only 3.1% of sales agreed have agreed have fallen through since the mini-budget, which is in line with the 3.0% over the same two weeks during 2019.
Agents are reporting that those who managed to secure a mortgage offer at a lower rate are rushing to complete their purchase before that lower rate offer expires, according to Rightmove.
“The vast majority of buyers who had already agreed their purchase are still going ahead. Some aspiring first-time buyers will have had their plans dashed by the sudden nature of the mortgage rate rises, and now face a difficult situation with rents also rising, and a shortage of available homes to rent. Buyer demand was already starting to soften and higher interest rates were anticipated, but they’ve been brought forward sharply due to market uncertainties,” Bannister concluded.
