both consumers giving priority to their summer vacations.
Another important element is sellers’ price, which must be more aggressive to attract buyers who want to move before Christmas and take into account the time needed for completion (an average of 136 days or four and a half months).
Rightmove’s director of property science Tim Bannister commented: “A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays.
“Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end the year at around 7% annual growth, even with the wider economic uncertainty.”
The average price of properties going on the market has decreased to £365, 173 (-£4,795), yet the Rightmove House Price Index reports that buyer inquiries are still 20% higher than in 2019.
It is normal for this time of year for real estate values to drop in August. The reason for this seasonal reduction, according to Rightmove, is that both consumers prioritized their summer vacations.
Another crucial factor is the sellers’ asking price, which needs to be more competitive to draw buyers who want to close before Christmas while also taking into account the turnaround time (an average of 136 days or four and a half months).
Buyer enquiries to agents do not appear to have been particularly dented by the most recent interest rate rise, suggesting that despite the rate rising to 1.75%, many buyers are still committed to moving, and incorporating rate rises into their financial planning.
A combination of rising house prices and interest rates means that average monthly mortgage payments for new first-time buyers putting down a 10% deposit have now exceeded £1,000 for the first time, to reach £1,032. This is 27% higher than at the start of the year. Demand for properties in the first-time buyer sector is 32% higher than August 2019.
Regarding these findings, Tim Bannister stated: “The data shows that interest rate rises are not now having a substantial influence on the number of people intending to move. It is expected that the impact of interest rate rises will gradually filter through during the rest of the year.
Demand has somewhat subsided, and buyers now have more options, but the two are still at odds, and the magnitude of this imbalance will preclude significant price declines this year.
“For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month.”
The Rightmove House Price Index has been in existence for 20 years. National average asking prices have increased by 134% since the beginning, from £155,994 to £365,173. Over those 20 years, average incomes have increased by 76%, while the Retail Price Index has soared by 93%. As a result, house prices have expanded faster than both average salaries and overall inflation.
Jordan Yorath, a partner at Monroe Estate Agents in Leeds, said they had been advising their clients in the “higher value property sector” to market their home outside of the traditional holiday period and outside of August in particular, which follows recorded property trends in the summer months.
Josephine Ashby, managing partner of John Bray Estate Agents in Rock, North Cornwall said: “We have seen values rise over 15-20% in North Cornwall and going forward this growth will slow.
“In the very prime areas however, values tend to stabilize and vendors who don’t need to sell simply wait for the best time. We are still finding that the very top of the market is performing exceptionally well.”
