Rightmove’s latest forecast for 2024 coincided with a significant 1.9% drop in asking prices within just a month. The usual December trend of a decline in new seller asking prices, attributed to seasonal factors, has taken an interesting turn. This decrease, equivalent to nearly £7,000 on an average-priced house, surpasses the typical 20-year average of 1.5%, indicating a heightened level of competitiveness among sellers.
Sellers are adjusting their strategies to navigate market dynamics, making this deviation from the usual seasonal pattern more pronounced and noteworthy.
The decline in asking prices, as reported by the portal, is attributed in part to an increasing number of new sellers opting to set prices below the prevailing competition, responding to the current shift towards a buyer’s market. With this month’s drop, 2023 concludes with national average asking prices down by 1.1% compared to the same period last year.
The ongoing price adjustments, beyond the typical seasonal trends, indicate that some sellers are heeding advice from agents to adopt a competitive pricing strategy. The year began with uncertainty, influenced by the aftermath of the Autumn mini-Budget, leading to reduced activity levels. Persistent challenges, including high mortgage rates impacting buyer affordability, are anticipated to extend into the upcoming year.
The decline in asking prices, as reported by the portal, is attributed in part to an increasing number of new sellers opting to set prices below the prevailing competition, responding to the current shift towards a buyer’s market. With this month’s drop, 2023 concludes with national average asking prices down by 1.1% compared to the same period last year.
The ongoing price adjustments, beyond the typical seasonal trends, indicate that some sellers are heeding advice from agents to adopt a competitive pricing strategy. The year began with uncertainty, influenced by the aftermath of the Autumn mini-Budget, leading to reduced activity levels. Persistent challenges, including high mortgage rates impacting buyer affordability, are anticipated to extend into the upcoming year.
Nationwide, average asking prices have seen a slight decline of 1.1% compared to the previous year. However, the property market reveals a diverse landscape across Great Britain, comprising numerous hyper-local markets. This diversity underscores the importance for sellers to align their pricing strategies with the specific trends in their local markets.
In this context, new seller asking prices exhibit an upward trend in seven out of the 11 regions in Great Britain compared to the previous year. The North West leads with a 1.5% increase, while the South East lags behind as the least favorable performer with a 3.7% decline from 2022. Concurrently, there has been a consistent decrease in average mortgage rates over the past 19 weeks, with the current average five-year fixed mortgage rate standing at 5.11%, a notable reduction from the 6.11% recorded in July.
Next year, Rightmove anticipates the resurgence of a trend where more families opt to trade up for additional space. With a more stabilized mortgage market and the expectation that the Bank of England Base Rate has reached its peak, individuals looking to ascend the property ladder and secure a larger mortgage—many of whom deferred their plans following the mini-budget—may now feel more confident to proceed.
Early indications suggest increased activity in the family mover segment, with a notable rise in demand for mid-market second-stepper properties (comprising three and four-bedroom homes, excluding four-bedroom detached houses). This demand has seen a nine percent increase compared to the post-mini-budget period last year, outpacing the overall demand increase of six percent. However, it remains crucial for first-time buyers to contribute to the market’s momentum and anchor the foundation of property chains.
Despite a stabilizing mortgage market, sellers are advised to adopt competitive pricing strategies, particularly those with urgent selling needs, as elevated interest rates are expected to persist, influencing buyer affordability. Rightmove’s forecast for 2024 anticipates a national average asking price decrease of around one percent, reflecting the ongoing impact of higher interest rates on the market.
Bannister notes, “With mortgage rates showing more stability and a gradual decline, prospective movers who have been patiently awaiting a more composed market may opt to take action in the early months of next year. As tradition holds, there’s typically a substantial post-Christmas surge in Rightmove traffic, with early bird buyers commencing their property search on Boxing Day.”
Anticipation is building among sellers, especially those contemplating a post-Christmas listing, for a potential upturn in the market in the coming year. Rightmove’s research and agent feedback suggest that the most effective strategy in the current market is to set an enticing price from the outset, avoiding the risk of later price reductions. This approach aims to capture the interest of early-bird buyers in the New Year while preventing a prolonged selling process that could extend into the Easter period.
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