The UK property market displayed a minor uptick in September as the average asking price for newly listed properties nudged up by 0.4%. Despite this subtle increase, the overall average asking price is still trailing at a 0.4% year-on-year decline, standing at £366,281.
Rightmove forecasts a potential dip in asking prices by around 2% for the year. Crucially, these figures pertain to the asking prices and not the final selling prices. The website’s data reveals that a significant 36.3% of properties have undergone price reductions. This rate of decrease is the steepest since 2011. The reductions are notable, with an average decrement of £22,700, translating to a 6.2% dip from the original asking price.
Sarah Coles, head of personal finance at Hargreaves Lansdown, commented:
“This isn’t a house price rise. It’s an indication of how desperate sellers are to defy the miserable realities of the housing market right now. Sky high mortgage rates mean demand has dropped like a stone, house prices have fallen, and sales have dried up. However, not all sellers are prepared to accept it right now – so asking prices are up over the past month.
Reality lurks in the fact that over a third of people have chanced their arm by setting an overly optimistic asking price – and then been forced to cut it. An average drop of 6.2% highlights the gulf between optimism and reality.
This mispricing is gumming up the works, so sales are sluggish – down around a fifth (18%) in a year. It means homes are taking 57 days to find a buyer, up from 35 in the same month a year earlier.
It’s perfectly understandable. When we’ve seen prices rise so far and so fast, there’s the temptation to cling to the hope that they’ll keep doing so – at least until you’ve had the chance to sell. In reality, however, prices have turned, and if sellers don’t realise this up-front, they’re likely to sell for less in the end. They’ll waste the initial interest in their property, because buyers will baulk at the price. They’ll then have to cut – at least once – which buyers may read as off-putting levels of desperation. Being too optimistic can be an expensive mistake in a market like this one.”