Rightmove has reported that the average price of property coming to the market for sale in August has seen a seasonal drop of 1.5% (-£5,708) to £367,785.
New seller asking prices have fallen in the month of August for the past 18 years, and the size of this month’s drop is in line with the long-term average.
Rightmove explained that school summer holidays traditionally bring a dip in prices, as some buyers put their home-moving plans on hold to enjoy holidays or time with family. This also means that new sellers who do come to market at this quieter time of year may have a pressing need to sell, which means they tend to price more competitively.
However, the report also stated that summer sellers this year may find that there is a degree of “buyer buzz” around the market that was missing in the peak-mortgage-rate market at this time last year.
As anticipated in Rightmove’s July report, the first Bank of England rate cut for four years at the start of the month has helped to accelerate mortgage rate drops and contributed significantly to improved buyer demand. These better conditions are helping to set up a positive Autumn market, and a further spur to activity following the Bank Rate cut has led Rightmove to raise its 2024 forecast from a 1% drop over the whole of 2024 to a 1% rise in new seller asking prices.
Tim Bannister, Rightmove’s director of property science, said: “The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity. While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.
“As the summer holiday season comes to an end, the conditions are there for a more active autumn market. The reaction from home-movers to what is hopefully only 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 prediction for the year.
“We now expect new seller prices to rise marginally by 1% over the whole of 2024. This is a relatively small revision from our original prediction of a 1% fall in prices over the year, since we didn’t initially forecast anything more drastic than a slight drop in prices this year.”
Chris Little, chief revenue officer at finova, added: “Today’s news might reflect a slight dip in activity, but given the current economic climate, it is not entirely unexpected. The much-anticipated cut to the base rate has still enhanced activity, providing welcome relief for those battling affordability constraints.
“With further potential rate reductions on the cards, this period has created the perfect conditions for a mortgage price war, with high street heavyweights and specialist lenders alike announcing a string of rate reductions. Everything is to play for, and speed-to-market times will be decisive.
“The coming months will be a time of heated competition and lenders who harness technology to streamline property transactions will be in a strong position. Borrowers are spoilt for choice and will have little interest in jumping through the analogue hoops of outdated legacy systems. Investment into dynamic pricing engines early is primed to give lenders a competitive edge, simplify new product launches, and elevate the experience for borrowers, savers, and brokers.”