In the closing quarter of 2023, house prices in England and Wales are anticipated to decline by 4%, as revealed in recent research by Reallymoving.

After analysing 221,000 agreed property sale prices, the report suggests that the average property price is set to decrease from its Q3 value of £336,999 to an estimated £323,594 in Q4.

This decline can be attributed to the challenges of ongoing high inflation, escalating living costs, and rising mortgage rates which are collectively dampening the housing market.

The Quarterly House Price Forecast by Reallymoving utilises data sourced from conveyancing quote forms. As registrations for such quotes are typically made soon after an agreement on sale/purchase and approximately 12 weeks prior to finalising the transaction, Reallymoving posits that their data offers a “unique forecast” of what the Land Registry data will reflect in three months.

Reallymoving points out that although the ramifications of inflation have been gradual, with property asking prices remaining consistently high throughout the year, it’s evident that current buyers are now settling on prices lower than the previous quarter. This will result in the average house price reverting to its Q1 2023 level by the end of the year.

Rob Houghton, the founder and CEO of Reallymoving, expressed his perspective on the trend: “Buyers who agreed property purchases in the third quarter of the year are spending significantly less than they did in Q2, so sellers have clearly been forced to adjust their expectations in order to secure a sale.”

Considering the economic strain on buyers, especially in light of the heightened interest rates and its subsequent influence on buyer confidence, Houghton says it was inevitable that the prices buyers were willing to pay would eventually drop.

Nevertheless, for those looking to make their first property purchase, this trend offers a silver lining. As Houghton points out, this dip in prices provides an opportunity for first-time buyers to break free from the cycle of “eye-watering rent” hikes.

He further notes, “As a buyer group, they accounted for 53% of all home moves in Q3 – the highest proportion in over a year.” Houghton remains optimistic about the future, expecting an influx of first-time buyers ready to enter the market in the upcoming months, especially if interest rates hint at a decrease.