UK House Prices Decline by £4,969 as Sellers Adjust Strategies

House prices in the UK have experienced a notable decline of £4,969, with average asking prices for new listings dropping to £368,740 in August. This shift is attributed to sellers adopting more competitive pricing strategies during the summer months, according to the latest house price index from Rightmove. The decrease reflects a broader trend, as prices have fallen by over £10,000 compared to three months ago, marking a significant adjustment in the market.

The competitive pricing strategy is particularly important during this traditionally quieter season, when holiday distractions often affect buyer activity. Property expert Colleen Babcock from Rightmove commented on the market dynamics, stating, “Savvy summer sellers have read the room and are coming to market with even more competitive pricing than usual to really stand out and attract serious and active buyers.” With prices now an average of £10,000 lower than in May, buyers hold a stronger position in negotiations, supported by a high supply of available homes.

Sales activity has shown a positive trend, with the number of agreements in July reaching its highest point for this time of year since 2020. During that period, the market had just reopened following the initial pandemic lockdown, accompanied by substantial stamp duty reductions. Despite this encouraging news, Babcock cautioned that many sellers are still entering the market with prices that may be too high, necessitating reductions to remain competitive.

According to Rightmove’s data, properties that are priced correctly from the outset typically find buyers in an average of 32 days. In contrast, homes requiring a price reduction take significantly longer, averaging 99 days to secure a sale. This highlights the critical importance of accurate pricing in achieving timely transactions.

As of now, the number of available homes for sale is 10% higher than at this time last year, maintaining a decade-high inventory level. However, the influx of new properties has only increased by 4% compared to last year, hinting at a potential slowdown in supply levels. Babcock noted, “We expect this good buyer activity to help support prices in the next few months.”

The recent economic landscape, including the Bank of England’s anticipated interest rate cut, has fostered a more optimistic market outlook. Rightmove’s daily mortgage tracker reveals an improvement in buyer affordability, with the average two-year fixed mortgage rate now at 4.49%, down from 5.17% a year ago. This change translates to a monthly saving of £117 for buyers securing a mortgage on the average home, based on a 20% deposit and a 30-year repayment plan.

Mortgage expert Matt Smith emphasized the potential for further adjustments in the current market, stating, “The markets are currently forecasting one more base rate cut before the end of the year.” He also noted that while lenders are lowering their rates to stay competitive, substantial reductions might be limited.

Looking ahead, Steve Beercock, executive director at Beercocks in Yorkshire and The Humber, expressed optimism for the month of September, suggesting that the recent shifts in interest rates are already stimulating buyer activity. He remarked, “August has started with some real momentum,” indicating a strong start with a notable surge in sales.

Meanwhile, Amy Reynolds, head of sales at Antony Roberts in Richmond, London, reported that both July and August have exceeded expectations in terms of sales activity. Despite a slowing market for first-time buyers after the end of the stamp duty holiday, Reynolds noted a rebound in demand, particularly for well-priced homes.

As the summer holiday period concludes, the market is expected to transition into a more active autumn. Buyers who hesitate may find their preferred properties snatched up quickly, reinforcing the importance of timely engagement in this dynamic housing landscape.