Rightmove reveals the latest on asking house prices
The average asking price of houses coming to market fell by £82 to £372,812 in June, making its first monthly drop this year, property listing platform Rightmove has reported.
Though the impact of the current volatility in the mortgage market on house prices seemed minimal, house price growth slowed to 1.1% over the past year, and a 2% fall in asking prices is expected by the end of the year.
This month’s house price movement is below the 10-year average for June, where prices have generally risen by 0.6%. The decrease is also the first such drop in June since 2017.
Asking prices grew the largest in the North East, increasing by 4.9% to £188,414. In London, prices fell by 1.6% to £685,241 in June.
“Average new seller asking prices, the first and leading indicator of new trends in the market, have dropped slightly this month, signalling the belated spring price bounce has quickly turned into an earlier-than-usual summer slowdown,” Tim Bannister, director of property science at Rightmove, commented on the findings of the latest house price index.
“We expected some more twists and turns this year, and we’ve had several in the last month, including stubbornly high inflation figures, surprisingly large average wage increases, and their eventual impact on mortgage interest rates and availability.”
Tomer Aboody, director of property lender MT Finance, said that while it seemed a few weeks ago that we might be nearing the ceiling of rates rises, the past month and sentiments have shown that there is still a way to go.
“The uncertainties, along with rates rises, have inevitably resulted in an insecure situation, with buyers not desperate to pull the trigger since they’re not sure what will happen with mortgage rates and whether they will meet affordability criteria once they come to take out a deal,” Aboody pointed out.
“Is it now time to get used to a ‘new world’ of interest rates trending at around 5% to 7%, with buyers expecting and accepting these levels and making the numbers work for their situation, as well as being realistic as to what they can afford?”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added that the recent mortgage market turbulence was dampening the increase in prices and activity, which we would usually see at this time of year.
“However, these are, of course, only aspirational not achieved values,” he noted. “On the street, prices are softening as cash and equity-rich buyers, in particular, continue to hold sway over those relying on increasingly hard-to-obtain loans. Negative publicity is helping lower expectations and encourage more seller realism.”
Bannister, however, said that more change could be expected depending on this week’s inflation figures and the Bank of England base rate decision.
“It is likely to feel very frenetic for those taking out a mortgage right now, as they try to quickly lock in the best rate that they can find,” he said.
Any thoughts on the findings of this month’s Rightmove House Price Index? Let us know by leaving a comment in the discussion box at the bottom of the page.
