Property sale prices are falling, says Rightmove, as home sellers list at lower prices to attract wary buyers

Property sale prices have fallen over the past month, according to Rightmove, as new sellers tried to attract buyers by listing at lower prices.

The average price of a newly listed home fell by 0.4 per cent, or £1,617.

According to the real estate website, this is a slightly larger drop than normal for this time of year. Sales prices have fallen an average of 0.2 percent in July over the past two decades, due to the slower holiday season.

This means the average property on the market is now on sale for £373,493, although they typically sell for less, with the average property selling price at just over £288,000 according to the latest data from Halifax.

The typical selling price is still 0.4 percent higher than a year ago.

Rightmove attributes the drop in new asking prices to the fact that those moving are having to deal with more distractions than usual, including the Euro 2024 football tournament and the general election.

Buyers have also been waiting for the first interest rate cut, according to the latest survey by the Royal Institution of Chartered Surveyors.

At the start of the year, the general consensus was that the base rate would be cut six or seven times this year, with the first one coming in March. This led many to hope that mortgage rates could also fall.

However, thanks to persistent inflation readings both here and in the US, no base rate cuts have materialised and mortgage rates have in fact risen, although banks have been cutting them in recent weeks.

Markets now expect the base rate to be cut only once or twice this year, with the first cut coming in August or September.

But although interest rate cuts have been delayed, Tim Bannister, a property expert at Rightmove, believes the political certainty of having the next government in place will help homebuyer confidence in the second half of the year.

He said: ‘The three big uncertainties hanging over the property market at the start of the year were when the first interest rate cut would occur and the timing and outcome of the general election.

“We now have the political certainty of a new government with a large majority, which we hope will help generate confidence in citizens who are moving house.”

He added: “It is early days, but Labour’s announcements on housebuilding targets and planning reform are positive signs that the Government is prepared to follow through on its manifesto promises.

‘Given that there are many areas of the market that could be improved, we hope that the new Government can move forward with its plans and implement sustainable housing policies that will help the market in the medium and long term.’

Sales prices rise most in the north of England

There is also a north-south-south divide when it comes to sales prices.

In the North West of England, the average sales price rose by 0.8 per cent over the past month, 3.5 per cent more than the same period last year.

Similarly, in the North East of England, average new home sales prices rose 0.5 per cent this month, up 4.6 per cent annually.

However, in the south-east of England, average sales prices fell by 2 per cent this month and in the south-west, sales prices fell by 0.5 per cent.

Signs of an improving real estate market

The latest Rics survey painted a gloomy picture of the market, with estate agents and surveyors reporting fewer buyer enquiries and fewer sales in June, but Rightmove suggests things are slightly better.

Their report says the number of sales being agreed is now 15 percent higher than the same period last year, at a time when mortgage rates were reaching their peak.

The number of new sellers coming to the market in the past four weeks also remained steady at 3 percent, up from last year.

The average number of properties for sale per real estate agency has also been steadily increasing this year. In June, there were 61 properties for sale per agency, compared to 49 at the beginning of the year.

However, fears of an oversupply of homes on the market are eased by the fact that Rightmove data also suggests sellers are taking less time to find a buyer.

Since the beginning of the year, the average time to find a buyer has fallen from 78 days to 59 days, according to the real estate website.

Rightmove also says the number of prospective buyers contacting estate agents about homes for sale has remained stable over the past four weeks compared to this time last year.

However, there has been a slight drop in the number of first-time buyers looking for a home, with some hoping for rate cuts to improve affordability.

“This positive sales figure highlights that serious homebuyers have not been deterred by the general election and have pressed ahead with their moves,” said Tim Bannister of Rightmove.

‘A key concern for many of those moving is when the Bank of England’s first base rate cut will come, and there are signs that some groups of people are waiting for this to happen before acting.

‘A base rate cut is expected to lead to lower mortgage rates, which could be a game-changer for some potential homebuyers who are held back by significantly higher monthly mortgage costs.’

Some real estate agents also seem to think that things can only get better from here.

Matt Nicol, managing director at Nicol & Co in Worcestershire, said: ‘With CPI inflation down to 2 per cent and potential base rate cuts ahead, the outlook remains optimistic.

‘The new Government’s focus on keeping taxes, inflation and mortgage rates low, along with plans to improve the planning system and unlock much-needed housing development, was positive news highlighted by the new Chancellor earlier this week, and we hope this can contribute to the positive outlook for a healthy autumn market and beyond.’

However, Jeremy Leaf, a north London estate agent and former chairman of Rics Residential, does not believe house prices will rise any time soon.

He said: ‘Over the past month and especially since the election result, we have seen an upturn in confidence and activity.

“However, we are not getting carried away, as increased supply and ongoing economic concerns will keep homeowners’ higher-price aspirations in check.”