Decline in Average Asking Home Prices Marks Largest July Drop in Over Two Decades, According to Rightmove
In the UK housing market, there's a noticeable shift as asking prices drop and mortgage rates decrease, providing a boost to homebuyers and sellers alike.
According to data from Rightmove, the average asking price for properties in July 2023 stands at £373,709, marking a 1.2% decrease from the previous month. This drop, while significant, is actually a positive development, reflecting increased supply and the need for sellers to price competitively.
The market's response has been encouraging, with buyer enquiries rising by 6% year-on-year and agreed sales reaching the highest July level since 2021, up 5% compared to the previous year. This improved housing affordability, as average earnings have grown over 5% while mortgage rates have declined, saving buyers approximately £150 per month on average mortgages.
The high supply of homes, at a decade-long high, has given buyers more choice and the ability to spot overpriced properties, prompting sellers to adjust prices to avoid being overlooked. The fall in asking prices was observed across most UK regions, with Greater London seeing a larger decline of 1.5%, particularly in prime areas where prices dropped by 2.1%.
The North West and South West saw asking prices fall by 1.2% and 1.1% on the month, respectively. The South East, despite a 1.2% month-on-month fall, has still grown by 0.2% on the year. The East Midlands, however, reported no change in asking prices in July, remaining steady at £257,842.
Nathan Emerson, CEO of Propertymark, commented on the market trends, stating that England and Northern Ireland are witnessing a steady return to normality. The property market in the UK is returning to normal following hikes to stamp duty that came into effect in April.
The markets expect the Bank of England's Monetary Policy Committee to cut interest rates twice more this year, potentially stimulating further property market activity. This could signal a continued positive trend for the UK housing market, offering more opportunities for both buyers and sellers.
In conclusion, the recent drop in average asking prices in the UK, while initially surprising, is a reflection of increased supply and the need for sellers to price competitively. The market's response has been encouraging, with increased buyer interest and a higher number of sales agreed. This, coupled with improved affordability due to slower price growth and lower mortgage costs, suggests a promising future for the UK housing market.
- Efforts to invest in real-estate could become more appealing due to the drop in property asking prices and reduced interest rates, offering individuals an opportunity to enter the housing market.
- The decline in mortgage rates, coupled with increased earnings, results in significant savings for homebuyers, making housing more affordable and stimulating further activity in the UK real-estate market.
- As the Bank of England prepares to lower interest rates further this year, the finance world eagerly anticipates a potential surge in property market activity driven by lower costs, increased affordability, and the ongoing trend of falling average asking prices in the UK housing market.
