National asking prices fell an average of 1.7% in November to £362,143, the largest decline for the month since 2018 as sellers struggle to find a buyer.
Annually, asking prices fell 1.3%.
Sales agreed are 10% lower than in November 2019, an improvement on the previous month when the number of transactions was 15% down.
Sellers typically drop their asking prices in the run up to Christmas to attract the interest of distracted buyers, according to Rightmove’s market analysis. But this month’s average price cut is the highest in five years. Average asking prices are 3% off the peak seen in May.
Meanwhile, the property portal’s analysis highlights that the pandemic-driven stock shortage is over, with available properties for sale now 1% behind 2019.
Affordability issues continue
Tim Bannister, Rightmove’s director of property science, said: “The larger than usual price drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition. Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates.”
Bannister added that chances of securing a buyer were much greater if sellers priced correctly from the outset rather than over-pricing initially and then cutting the price tag later.
It took 62 days, on average, to secure a buyer last month compared to 40 days in October 2022. Part-way through October 2022, the fall-out from the former Prime Minister Liz Truss’s disastrous mini Budget was feeding through into mortgage rates which peaked towards the end of that month. The effects can be seen taking hold of buying activity as the time taken to find a buyer crept up to 62 days by January 2023.
Not all regions are reflecting the national average cut in asking prices. The North West and West Midlands both saw sellers cut prices by 0.5% on average, compared to October. Annually, asking prices in the North West rose by 2.5% in contrast to the UK-wide picture where prices were 1.3% lower than the same period last year.
Yorkshire & the Humber also experienced a rise in average asking prices by 0.2%.
Some market sectors are faring better than others too. The number of sales agreed for studio, one- and two-bed properties is 7% lower than 2019’s level, compared to four-bed detached houses and all five-bed plus properties, where agreed sales are 14% behind 2019.
Bannister added: “This year has brought many new challenges for buyers, sellers and agents to navigate. While there have been many twists and turns, and there are still seven weeks left of the year, the data indicates that there has been more to be positive about in 2023 than many thought there would be at this time last year.
“The upcoming Autumn Statement will now set the tone heading into 2024, particularly if there are any major policy announcements. We hope that the government has considered the impact on the market of any new policies, and that any measures introduced help as many movers as possible. An announcement as limited as a mortgage guarantee scheme renewal would be a missed opportunity to provide some support to movers, particularly first-time buyers.”