Summer housing market remains subdued as annual price change drops to -0.4%: Rightmove

Average new seller asking prices increased marginally by 0.4% in August to £366,281, lower than is usual for this time of year, the latest Rightmove data shows.

As a result, the annual price change has dropped further to -0.4%, the biggest fall since March 2019, meaning that prices are still on track to meet Rightmove's prediction of a 2% fall over the year as a whole.

August was quieter than usual for new sellers, with the number of new properties coming up for sale being 6% lower than the ten-year average. Buyer enquiries remained stable, down just 1% on 2019, but the number of sales agreed fell further, now down 18% compared to 2019.

Rightmove says subdued activity is due to combination of interest rate rises and summer holiday distractions, leading to price reductions creeping up to a level not seen since January 2011.

36.3% of properties currently for sale have had a price reduction, the highest recorded since January 2011, with an average reduction equating to £22,700 nationally (6.2%).

The number of available properties remains down by 7% on 2019 but signs of activity starting to pick up, with back-to-school sellers helping the number of new properties coming to market to jump by 12% in the first week of September when compared with the average weekly number throughout August.

In addition, there have been small steps towards improved buyer affordability as mortgage rates continue to fall: the average five-year fixed mortgage is now at 5.67%, the seventh consecutive week of five-year fixed rates dropping, after peaking at 6.11% in July.

Tim Bannister, Rightmove’s director of property, commented: “It’s been a slower than usual August, so all eyes will be on market activity over the next few weeks, which will set the trend for the rest of the year. The combination of 14 consecutive Bank of England interest rate rises and many buyers and sellers still catching up on lost pandemic holidays has contributed to a bigger than expected summer lull, though we still anticipate an autumn bounce. Market conditions still vary considerably in different locations, and so a local estate agent will be best placed to advise sellers to give them the best chance of finding a buyer this autumn.

“As we enter a key selling season, more people who have been thinking about what they need from a home and where they want to be living next year and beyond are taking action and coming to market. This has helped to improve buyer choice, especially for those looking for larger homes, which also means that new sellers in the middle and upper sectors need to be extra careful not to set their price expectations too high. Plenty of sales are being agreed for properties that are priced at the right level, and those that are selling are still taking five days less than at this time in 2019. We’re also seeing the number of fall-throughs decline as market conditions and mortgage rates stabilise.”