Property platform also predicts asking price movement for next year
The average price of property coming to market saw a 1.9% drop, or an equivalent of £6,966, to £355,177 in December, according to property listing platform Rightmove.
While prices usually fall in December due to seasonal factors, Rightmove said this dip in average new seller asking prices is bigger than the previous 20-year average of 1.5% due, in part, to an increasing number of new sellers opting to set prices below the prevailing competition, reflecting a shift towards a buyers’ market.
Consequently, the year concludes with national average asking prices 1.1% lower than the same period last year.
“Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively,” said Tim Bannister, director of property science at Rightmove, commenting on the real estate property portal’s latest House Price Index.
“We entered this year under a cloud of uncertainty, as the fallout from the autumn mini budget filtered through to lower activity levels. High mortgage rates, which have added to already-stretched buyer affordability, have been a challenge throughout 2023 and this is likely to carry into next year.
“However, for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much-better-than-predicted resilience this year.”
Despite a national decrease of 1.1% in average asking prices compared to the previous year, Rightmove reported that regional disparities are evident across Great Britain’s diverse markets.
Among the 11 areas, seven reported higher average new seller asking prices than a year ago. The North West leads with a 1.5% increase, while the South East lags as the worst performer, experiencing a 3.7% decline from 2022.
According to Rightmove, the continuous decline in average mortgage rates for 19 consecutive weeks, with the five-year fixed mortgage rate now at 5.11% compared to July’s 6.11%, sets the stage for the coming year.
An expected resurgence of family movers seeking more spacious accommodation is also forecast, bolstered by a more settled mortgage market and the perception that the Bank of England base rate has peaked.
Despite the expected stability in the mortgage market, persistently elevated interest rates in the coming year will likely exert pressure on buyer affordability. As a result, Rightmove predicts a national average asking price decline of 1% in 2024.
“2023 has been an interesting year, with very little straightforward, yet far from the negative market it might have been given the broader economy,” Bannister said. “While there has been a lower transaction level than the previous few years and some adjustment in values, attractively priced property is selling.
“There is less risk taking and the fluctuation of mortgage rates has made it a bumpy road for some, but as we turn towards 2024, we are hopeful that activity will continue despite a general election.
“Our advice to both buyers and sellers is to be realistic with expectations, it is potentially an easier market for buyers in prime areas with more choice and less pressure. Vendors, get organized, take early interest seriously, and above all, pitch values at an attractive level from the outset.”
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