The average price of new property on the market has increased by 0.9%, or by £3,398 to £371,158 claim Rightmove. The increase is due to, in the main, simple supply and demand.
Rightmove adds that there is a high chance asking prices will drop in the winter months, and it will be important to distinguish these seasonal price changes from market fluctuations. Rightmove says because of this, it will halt from making a property price prediction for 2023 until the economy is more predictable.
Rightmove’s Tim Bannister explained: ‘What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget.
He adds ‘there has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues. New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average.’
Moreover, Bannister believes ‘it will take a bit of time for the market to settle into a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.’
Rightmove argues ‘the recent hike in mortgage interest rates has caused some would-be home-movers to pause their plans and wait to see how the next few weeks and months unfold.’
Overall demand is down by 15% in the last two weeks compared with the same two weeks last year. However, this is still 20% higher than the more normal market of 2019, Rightmove states.
Bannister spoke once more: ‘the vast majority of buyers who had already agreed their purchase are still going ahead. Some aspiring first-time buyers will have had their plans dashed by the sudden nature of the mortgage rate rises, and now face a difficult situation with rents also rising, and a shortage of available homes to rent.’
He adds one more point: ‘buyer demand was already starting to soften and higher interest rates were anticipated, but they’ve been brought forward sharply due to market uncertainties. Agents report that many of those who managed to secure a mortgage offer at a lower rate before lenders quickly increased them are now rushing through their agreed deal to avoid their offer expiring and facing a higher rate when they come to reapply. It’s understandable that some new movers who have the option to wait, may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home.’
Bannister concludes: ‘with uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip supply and support prices.’