Property asking prices fall by more than £5,000 in August, says Rightmove

According to Rightmove, asking prices for homes fell for the first time this year in August, despite falling mortgage rates in recent weeks.

The average price of a new home for sale fell by 1.5 per cent, equating to an average of £5,708.

However, according to the real estate company’s website, fall is in line with what is normal for this time of year.

It was said that asking prices for new homes have fallen every August for the past 18 years, due to the quieter holiday season.

That means the average home on the market is now for sale for £367,785, even though they normally sell for less: the average sale price of a home is just over £289,000, according to the latest data from Halifax.

Although asking prices are falling, sellers who put their homes on the market during this traditionally quiet time of year may find that there is slightly more interest than they expected.

The Bank of England cut its base rate for the first time in four years on 1 August, leading to mortgage rate cuts, with Nationwide, HSBC, Halifax and Barclays among those cutting their rates.

Since the beginning of July, the lowest fixed interest rate for five years has fallen from 4.28 percent to 3.83 percent and the lowest fixed interest rate for two years from 4.68 percent to 4.22 percent.

Rightmove reports that the number of potential buyers approaching agents to view homes for sale has increased by 11 percent compared to last month and by 19 percent compared to August last year.

The real estate website expects lower mortgage rates and increased buyer demand to lead to higher asking prices later this year.

At the start of the year, Rightmove predicted asking prices would end the year 1 per cent lower. It now suggests prices will be 1 per cent higher.

Tim Bannister, director of property science at Rightmove, said: ‘TThe fact that the long-awaited first mortgage reduction has finally taken place and mortgage rates are falling is positive for homeowner sentiment.

With the summer holidays coming to an end, conditions are favorable for a more active fall market.

‘The response of homeowners to what we hope is just the first of several rate cuts over the next year or two, combined with other positive data and trends, has prompted us to raise our price forecast for the year.

‘We now expect new seller prices to rise slightly by 1 percent over the whole of 2024.’

It was previously predicted that asking prices would fall by 1 percent.

Down: August’s drop marks first drop in asking prices since December 2023

Where are house prices rising?

House prices have continued to rise this year.

Latest figures from the ONS show that the average home rose in value for the fifth month in a row in June, with the average home now worth £8,000 more than the same period last year.

However, much depends on the location of the houses in the country and the type of houses available.

In Northern Ireland, for example, sales prices rose by an average of 6.4 per cent in the 12 months to June, while in Scotland house prices rose by 4.3 per cent.

Meanwhile, England and Wales saw more modest house price growth of 2.4 percent and 1.8 percent year-on-year respectively.

The type of property also affects house prices. For example, semi-detached homes have risen in price by 4 per cent in the last 12 months, from £269,998 to £280,895.

However, the average price of an apartment or maisonette only rose by 0.5 percent during that period.

According to Rightmove data, there are similar regional variations when it comes to asking prices for new homes for sale.

New asking prices in the North East, North West and Yorkshire and the Humber have all risen by 3 per cent or more compared to August last year.

However, asking prices in the east, south west and south east of England are now all lower than 12 months ago.

Regional variation: Asking prices are rising year-on-year in northern parts of the UK, but in some areas in the south they are lower than 12 months ago

Gary Hamilton, founder of Bohome Estate Agents in Hamilton, Scotland, said: ‘July was a strong month for us, reflecting the resilience of our market.

‘We saw a mix of results, with some properties selling well above expected prices, while others sold closer to expected prices.

“As schools reopen and routines return to normal, we expect activity to increase further in the coming weeks.”

Gareth Overton, head of residential sales at estate agency Henry Adams, which operates in Sussex, Surrey and Hampshire in England, also expects business to pick up again in the autumn.

“It appears the Bank of England base rate has had a positive effect on homebuyer sentiment,” Overton said.

‘In areas such as Chichester, Midhurst and Bognor Regis the current sales market is particularly active and we have seen a marked increase in enquiries from people downsizing.

‘August is usually a quieter month due to the holidays, but the market remains resilient and growing steadily.’