The average asking price for properties listed in the UK has seen a modest increase of 0.3% this month, equivalent to £1,199, bringing the total to £371,958. This slight rise is an indication that many homeowners are adjusting their prices to sell more quickly in a highly competitive market. Sellers are keen to attract buyers by keeping asking prices manageable, reflecting a trend where properties are being priced to sell rather than to maximise profits. This pricing strategy aligns with the need to move homes off the market faster, especially as more properties are becoming available.

Despite the increase, the 0.3% rise is lower than the typical October rise of 1.3%, which suggests a shift in the usual seasonal patterns. The smaller increase can be attributed to a surge in the number of homes on the market, which has reached its highest level in ten years, according to data from property website Rightmove. With a greater number of properties available, buyers now have more options, making it harder for sellers to push for higher prices. As a result, many sellers are prioritising a faster sale over holding out for higher offers, leading to a more balanced market.

Rightmove’s report highlights how this increase in available housing is giving buyers more negotiating power, putting pressure on sellers to be more competitive with their pricing. The market is adjusting to these conditions, as buyers are now in a stronger position to choose from a wider range of properties. Sellers, in turn, are recognising the need to be realistic about pricing in order to secure offers in a timely manner. This shift marks a significant change in the dynamics of the UK housing market, where competitive pricing is becoming the key to achieving successful sales.

With a larger selection of properties now available, buyers are capitalising on their increased negotiating power. This wider choice is contributing to stabilising prices, as buyers are less inclined to accept inflated asking prices. As a result, price increases have been modest, with buyers driving harder bargains to secure better deals. Despite the uncertainty surrounding the autumn budget and concerns about potential economic shifts, market activity has remained relatively strong. This shows that there is still demand for homes, even with ongoing affordability concerns.

In response to the heightened competition, many sellers are choosing to price their homes more attractively. By setting more realistic asking prices, sellers are hoping to secure quicker sales and stand out in a crowded market. This approach is becoming more common, particularly as buyers are feeling the pinch of rising mortgage rates and tighter budgets. Sellers who are flexible with pricing are more likely to find buyers willing to move forward with offers, especially in this climate of financial caution.

Affordability challenges continue to be a significant factor for many potential buyers, particularly first-time buyers and those looking to move up the property ladder. However, there are growing signs that conditions might improve as we approach 2025. Analysts are hopeful that as the market adjusts and financial pressures ease, more buyers will be able to take advantage of opportunities. While the short-term outlook remains challenging, there is cautious optimism that the housing market will see greater stability in the coming years.

Tim Bannister, director of property science at Rightmove, highlighted that the slower pace of price growth this month coincides with a significant increase in the range of properties available to buyers. This shift in the market has put more negotiating power in buyers’ hands. With a wider variety of homes on offer, sellers are feeling the pressure to set their asking prices more competitively in order to attract interest. The result has been limited price increases, which are keeping the market from seeing the usual seasonal spike in asking prices.

Many sellers seem to be responding to this new dynamic, setting more realistic prices to stand out in an increasingly crowded market. This approach is helping to keep affordability in check for buyers who are navigating a market still characterised by high interest rates and stretched budgets. Despite the challenges, the property market remains more active than it was last year, with sales activity showing stronger performance compared to the quieter conditions of 2023.

While sales are on the rise, some buyers are holding back on making decisions. The uncertainty surrounding the upcoming budget and the potential for further reductions in mortgage rates later this year has led some prospective homeowners to take a wait-and-see approach. This cautious behaviour is understandable, as buyers are hoping for more favourable conditions before committing to a purchase.

Nevertheless, sales activity is notably higher, with agreed sales up by 29% compared to the same period last year. Inquiries to estate agents have also increased by 17%, suggesting that, despite some hesitation, there is a growing interest in the housing market. The increase in available properties has given buyers more options, and this is driving demand, even in the face of economic uncertainty.

Despite the increased market activity, both the number of new properties coming to market and the time taken to sell have been rising. This has resulted in a 12% increase in the number of homes available for sale compared to the same period last year. The average number of listings per estate agent branch is now at its highest level since 2014, signalling a shift towards a more competitive landscape for sellers.

The competition is particularly noticeable in the high-end property market. There has been a 17% increase in the availability of four-bedroom detached homes and larger properties compared to last year. Sellers in this segment of the market are feeling the pressure to price their homes more competitively to attract buyers, as it remains a buyer-driven market with a larger supply of available homes.

Additionally, after a period of mortgage rate cuts following the Bank of England’s interest rate reduction in August, the market is showing signs of stabilisation. The average five-year fixed mortgage rate has risen slightly to 4.61%, up from 4.55% last week. This gradual increase in mortgage rates could dampen buyer activity, though rates remain below the peak levels seen earlier this year.

Chris Rowson, managing director of Sharman Quinney in Peterborough, highlighted the recent surge in new listings. He noted that his office had seen one of its busiest months for new sellers in a decade, with a noticeable rise in both new instructions and agreed sales. This reflects a market that, while still competitive for sellers, continues to show strong activity as buyers search for opportunities amidst fluctuating mortgage rates.

The recent bank rate cut and lower mortgage rates have prompted more sellers to list their properties, according to market experts. Despite concerns surrounding the upcoming budget, there is no significant hesitation among buyers, and activity in the housing market remains steady. 

Rightmove has noted some positive signs for the year ahead, with predictions of two further bank rate cuts by the end of 2025. If these cuts occur, they could lead to additional decreases in mortgage rates, which would be welcomed by many prospective buyers. 

While mortgage rates are unlikely to return to the low levels seen in previous years, a combination of moderate house price growth and wage increases could offer a lifeline to those struggling to get on the property ladder. This shift could improve affordability for buyers facing current financial challenges.

Tim Bannister from Rightmove added that clarity on the budget, coupled with the expected bank rate reductions, may reignite market optimism similar to last summer’s activity. These rate cuts could give a much-needed boost to affordability, helping potential buyers who have been waiting for a more favourable market to make their move.

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