Recent statistics indicate a critical need for competitive property pricing, as October sees the most modest rise in seller asking prices since 2008. According to data from the Rightmove House Price Index, average new seller asking prices have nudged up by a mere 0.5% (an increase of £1,950) this month, settling at £368,231. This uptick is substantially lower than the typical October average of 1.4%.
Notably, the current number of sales agreed is 17% lower compared to the same period last year. Despite this, Rightmove suggests that buyers remain on the hunt for appropriately priced properties, with enquiries per available home for sale standing 8% higher than the more regular market conditions of 2019.
The proportion of properties successfully finding buyers has experienced a downturn, sliding from eight out of every ten to just six in ten, spotlighting the vital role of correct pricing.
Tim Bannister, Rightmove’s Director of Property Science, reflects on the trend: “While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market.”
Sarah Coles, head of personal finance, Hargreaves Lansdown said: This was the most listless October bounce since the financial crisis. We usually see buyers spring back to the market after the summer holidays, keen to snap up a property before Christmas. This year there’s every sign we’ve gone from the summer holiday lull to winter hibernation, with very little bounce in the interim.
A hefty dose of realism is the only sales approach that works in a market like this. Overpriced properties not only struggle to recapture interest after a price cut, they also encourage buyers to think that if they hang around a bit longer, prices will fall even further. The index also found that those that started out overpriced were less likely to get from a sale to a completion, because sales tend to fall through somewhere along the way.
It’s hardly surprising people are thinking twice about over-stretching themselves. The HL Savings & Resilience Barometer found that the average mortgage payment is £765, but that couples with children pay an average of £902. Given that so many of them are on lower fixed rates, and those further down the track have much smaller monthly payments, it means those borrowing to buy today are likely to face far more alarming monthly costs, and need to think very carefully about what they can afford before taking the leap.”