Buyer choice hits decade high
The average asking price for properties coming onto the UK market has risen by 0.3% in October, or £1,199, bringing the average price to £371,958, according to the latest Rightmove House Price Index.
This is a smaller increase compared to the typical October rise of 1.3%, reflecting a more subdued market as buyer choice reaches its highest level in a decade.
An increase in available properties is giving buyers more negotiating power, which has tempered price growth. Despite ongoing affordability challenges, market activity remains strong, though some uncertainty surrounds the upcoming Autumn Budget. Many sellers are responding to the more competitive environment by pricing attractively, helping to maintain sales momentum.
“This month’s subdued price growth comes as buyer choice soars to a level not seen since 2014,” said Tim Bannister (pictured centre), Rightmove’s director of property science. “With affordability still stretched, some sellers are pricing competitively to find a buyer. This has contributed to better buyer affordability and has kept the number of sales agreed ahead of last year’s quieter market.”
Sales activity is up 29% compared to the same period in 2023, indicating a recovery from last year’s slowdown. The number of people contacting agents about homes for sale has also increased by 17%.
“There’s no question the market has changed considerably since last summer,” said Jeremy Leaf (pictured right), north London estate agent and a former RICS residential chairman. “Buyer and seller sentiment, which is of course is so crucial to activity, has improved.
“However, oversupply of stock in some areas and price ranges, as well as worries about the contents of the forthcoming Autumn Statement, has increased caution, deferred decision-making and kept prices in check.”
The volume of new properties entering the market, and the time they are taking to sell, are both rising, resulting in a 12% increase in the number of available homes compared to last year. This increase in supply, Rightmove noted, is particularly significant in the higher-end market, with the number of four- and five-bedroom homes up 17%.
“As a greater volume of properties come up for sale, this is creating a buyers’ market with those who can afford to buy having increased choice, enabling them to negotiate a better price,” commented Tomer Aboody (pictured left), director of specialist lender MT Finance. “This, in turn, is leading to a slowdown in growth in asking prices.”
Mortgage rates have recently stalled after a series of drops earlier in the year. The average five-year fixed mortgage rate now stands at 4.61%, up slightly from 4.55% the previous week, marking the first rise since May. While rates are still lower than the July 2023 peak of 6.11%, the recent uptick may dampen buyer confidence.
Energy costs are also a concern for homeowners. Rightmove’s Energy Bills Tracker shows that the average annual energy bill for a property with a typical energy performance certificate (EPC) rating of ‘D’ has increased by 10%, or £224, to £2,465 due to the latest energy price cap hike.
Looking ahead, there are signs that affordability could improve in 2025. Financial markets are predicting two Bank of England rate cuts by the end of the year, which could lead to further reductions in mortgage rates. While mortgage rates are unlikely to return to historic lows, any decreases, combined with wage growth and slower house price increases, could enhance buyer affordability.
“Despite uncertainty around the Budget, the outlook for 2025 remains positive,” Bannister said. “If the expected bank rate cuts materialise, we could see a boost in buyer confidence, especially among those previously priced out of the market.”
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