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Housing Market Reacts to First Drop in Average Asking Price This Year

According to Rightmove’s latest House Price Index, the average asking house price experienced its first drop of the year in June, albeit by a slight £82. This minor shift comes as homeowners and property investors continue grappling with rising mortgage rates.

This is the first time since 2017 that average asking prices have dropped in June, bringing the average UK house price to £372,812. In May, Rightmove’s index reported a 1.8% increase in average house prices.

However, over the past year, house price growth has decelerated to 1.1%. Rightmove forecasts a further 2% decline in asking prices by the end of 2023. The fluctuations in house prices, however, vary significantly across different regions.

For instance, the North East experienced the largest growth in asking prices in June, with the average property value rising 4.9% to £188,414. Conversely, London witnessed a 1.6% decline, bringing the average asking price down to £685,241.

Several industry experts have weighed in on these findings:

Tom Bill, Head of UK Residential Research at Knight Frank, noted: “Recent rate volatility hasn’t yet had a material impact on housing market activity because, if anything, those holding mortgage offers are keen to move sooner rather than later… Ironically, strong wage inflation rather than the mini-Budget is now the main brake on the housing market.”

Jean Jameson, Chief Sales Officer at Foxtons, noted that despite interest rate increases, “the market is busier than expected” and that they have not observed a significant rise in stressed sellers.

Former RICS Residential Chairman, Jeremy Leaf, opined that “cash and equity-rich buyers in particular continue to hold sway over those relying on increasingly hard-to-obtain loans.”

Emma Cox, MD of Real Estate at Shawbrook, advised that “professional investors and landlords may find this an optimal time to add to their property portfolio, making the most of deals within the market.”

Adam Feather, Head of Robert Anthony Estate Agents, urged vendors to price their properties realistically to ensure transactions.

Tomer Aboody, Director of Property Lender MT Finance, suggested that buyers might have to adapt to a ‘new world’ of interest rates trending at around 5 to 7 per cent and make their affordability calculations accordingly.