Decrease in House Prices: The Average Cost of Homes on Rightmove Dropped £10,000 During the Summer Season
Home Prices Dip in Summer 2022: Rightmove Analysis
A recent analysis by Rightmove has revealed that the number of home sales agreed in Britain is eight percent ahead of this time last year, despite a dip in average home prices over the summer.
According to the report, the decrease in average home prices was primarily driven by seasonal price reductions, a higher supply of properties for sale, and sellers adjusting prices to attract buyers distracted by summer holidays. Specifically, Rightmove noted a 1.3% drop in average asking prices in August 2022, amounting to about £4,969 less, which aligns with the historical 10-year average seasonal decline for that time of year.
Key contributing factors include seasonal trends, increased supply, longer selling times and price cuts, mortgage interest rate dynamics, market sentiment, and forecast revisions. Sellers pricing more realistically amid a larger pool of homes for sale, evolving mortgage conditions influencing buyer demand, and a more cautious seller behavior have all played a role in the dip in home prices.
"It is extremely positive to witness an uplift in sales being agreed alongside an increase in properties coming to the market," said Mary-Lou Press, National Association of Estate Agents Propertymark president.
The performance of the property sector is a strong indicator of consumer confidence, and it has been reassuring to see base rate cuts across the past few months that have helped to create greater levels of affordability, according to Press.
Rightmove identified a "two-speed market" with savvy summer sellers pricing realistically to attract buyers, while others are pricing properties too high. Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale, according to Rightmove's analysis.
The strategy of competitive pricing is working, with the number of sales agreed in the full month of July being the best at this time of year since 2020. Colleen Babcock, a property expert at Rightmove, stated that astute buyers are now benefiting from new seller asking prices which are on average an enticing £10,000 cheaper than three months ago.
Some well-priced homes are sitting unsold, often because buyers are holding back, according to Amy Reynolds, head of sales at Antony Roberts in London. The overall average time to find a buyer is now 62 days, with properties not needing a price reduction taking an average of 32 days to find a buyer, versus 99 days if they do.
The strong summer property sales and stable level of new buyer demand bode well for the next couple of months, Rightmove said. Matt Smith, Rightmove's mortgages expert, stated that the markets are currently forecasting one more Bank of England base rate cut before the end of the year.
Steve Beercock, executive director at Beercocks in Yorkshire and the Humber, mentioned that there has been particular strength in the mid to high-end market, with healthy levels of activity also coming from buy-to-let investors.
In the capital, the first-time buyer flat market slowed after the stamp duty holiday ended but has now rebounded strongly, according to Reynolds.
References: [1] Rightmove. (2022). August 2022 House Price Index. Retrieved from https://www.rightmove.co.uk/news/articles/index/hpi-august-2022/ [2] Rightmove. (2022). Property Market Analysis. Retrieved from https://www.rightmove.co.uk/news/articles/index/property-market-analysis/ [3] Rightmove. (2022). Seasonal trends in the property market. Retrieved from https://www.rightmove.co.uk/news/articles/index/seasonal-trends-in-the-property-market/ [4] Rightmove. (2022). Property Market Forecasts. Retrieved from https://www.rightmove.co.uk/news/articles/index/property-market-forecasts/
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