The average new seller asking price has increased by just 0.5 per cent in the past month - the smallest increase at this time of year since 2008.
It’s well below the historic norm in October of a rise of 1.4 per cent, says Rightmove.
On top of that the number of sales agreed is 17 per cent below this time last year, as those sellers who are struggling to adjust their price expectations to match current activity levels are finding that their homes are being left on the shelf.
The portal says buyers are still active for the right property at the right price, but agents advise that sellers need to capture attention with a competitive price from the first day of marketing, as starting too high and reducing later damages the chances of a sale.
The number of buyers enquiring to each available home for sale is eight per cent higher than the more normal market of 2019 but Rightmove draws attention to the importance of immediate buyer interest - if a property receives its first buyer enquiry on the first day of marketing rather than after two weeks, then Rightmove data shows that it is 60 per cent more likely to find a buyer.
The proportion of homes that are finding a buyer has dropped from eight in every 10 at the height of the frenzy, to a more subdued sales rate of six in every 10, making pricing competitively more critical to really stand out.
Tim Bannister, Rightmove’s director of property science, says: “New seller asking prices have seen a rise, as they usually do at this time of year following the summer holiday season. While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market.
“In a market that agents describe as the most price-sensitive ever, buyers are likely to be on the look-out for homes that they feel represent excellent value, and to attract one of these motivated buyers, sellers need to price right first time. If similar nearby properties for sale appear overpriced, serious sellers have an opportunity to stand out from the crowd with a more competitive price and attract immediate buyer interest that our research shows significantly increases the likelihood of finding a buyer.”
A more stable mortgage market is providing some home-movers with more confidence about what they are likely to be able to afford, even with rates remaining well above the ultra-low levels of recent years.
The average two-year fixed rate is below 6.0 per cent for the first time since June, and average two-year and five-year mortgage rates are both now lower than at this time last year during the post-mini-Budget period.
In the last 12 months, the average house price to earnings ratio has also decreased by close to 10 per cent, meaning that buyer affordability, while still stretched, has improved compared to this time last year.
Meanwhile, average fixed mortgage rates continue to trend downwards and have now fallen for 11 consecutive weeks, with the average five-year fixed rate dropping from 6.08 per cent to the current 5.43 per cent over that period. The cheapest available rates in some Loan-To-Value brackets are now below 5.0 per cent, with rates in other LTV’s edging closer to sub-5.0 per cent.