Property sale prices fell by more than £5,000 in August, says Rightmove

Property sale prices fell for the first time this year in August, according to Rightmove, despite mortgage rates falling in recent weeks.

The average price of a newly listed home fell by 1.5 per cent to an average of £5,708.

However, the drop is in line with normal for this time of year, according to the real estate website.

He said sales prices for new properties have fallen every August for the past 18 years, due to the slower holiday season.

This means the average property on the market is now on sale for £367,785, although they typically sell for less, with the average property selling price at just over £289,000 according to the latest data from Halifax.

While sales prices are coming down, sellers who hit the market during this traditionally slow time of year may find there is a little more interest than they expected.

The Bank of England cut its base rate for the first time in more than four years on 1 August and this has triggered cuts in mortgage rates, with Nationwide, HSBC, Halifax and Barclays all cutting theirs.

Since the beginning of July, the lowest five-year fixed rate has fallen from 4.28 percent to 3.83 percent and the lowest two-year fixed rate has fallen from 4.68 percent to 4.22 percent.

Rightmove says the number of potential buyers contacting estate agents to view homes for sale is up 11 per cent on last month and 19 per cent compared with August last year.

The real estate website expects lower mortgage rates and renewed buyer demand to translate into higher sales prices later this year.

At the start of the year, Rightmove predicted that sales prices would end the year 1% lower. It now suggests prices will rise by 1%.

Tim Bannister, director of property science at Rightmove, said: “TThe fact that the long-awaited first cut has finally arrived and mortgage rates are falling is positive for the sentiment of those looking to move house.

‘As the summer holiday season draws to a close, the conditions are ripe for a more active autumn market.

‘Homebuyer reaction to what we expect to be just the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price forecast for the year.

‘We now expect new sales prices to increase marginally by 1 percent over the full year 2024.’

Sales prices had previously been forecast to fall by 1 percent.

Below: The August drop is the first time sales prices have fallen since December 2023

Where are house prices rising?

House prices have continued to rise throughout this year.

The latest ONS figures showed that the value of the average home rose for a fifth consecutive month in June and that the typical property is now worth £8,000 more than it was at this time last year.

However, much depends on where the houses are located in the country, as well as the types of houses available.

For example, in the 12 months to June, sales prices in Northern Ireland rose by 6.4 per cent on average, while in Scotland house prices rose by 4.3 per cent.

Meanwhile, England and Wales have seen more modest house price growth, at 2.4 per cent and 1.8 per cent year-on-year respectively.

Property type also influences house prices. For example, terraced houses have increased by 4% in the last 12 months, from £269,998 to £280,895.

However, the average price of an apartment or duplex has only increased by 0.5 percent during that time.

According to Rightmove data, there are also similar regional variations when it comes to the sale prices of newly listed properties.

New asking prices in the North East, North West and Yorkshire and the Humber have all risen by 3 per cent or more compared with August last year.

However, sales prices in the East of England, the South West and the South East are seeing lower sales prices for newly listed homes now than they were 12 months ago.

Regional variation: Sales prices are increasing year-on-year in northern parts of the UK, however in some southern areas they are lower than 12 months ago.

Gary Hamilton, founder of Bohome Estate Agents in Hamilton, Scotland, said: ‘July was a strong month for us, reflecting the resilience of our market.

‘We have seen a mix of results, with some properties achieving prices well above expectations, while others sold close to them.

“With the return of classes and the return to normal routines, we hope that activity will recover even more in the coming weeks.”

Gareth Overton, head of residential sales at estate agents Henry Adams, which operates across Sussex, Surrey and Hampshire in England, also expects things to improve in the autumn.

“The Bank of England’s base rate appears to have had a positive impact on sentiment among those looking to move,” Overton said.

‘In areas such as Chichester, Midhurst and Bognor Regis, the current sales market is particularly active and we have seen a noticeable increase in enquiries from those downsizing across the board.

‘While August is typically a slightly quieter month due to the holiday season, the market continues to show resilience and is moving steadily forward.’