However the year to date has been better than many expected, Rightmove insists.
New seller asking prices are now just three per cent behind May’s peak and this relatively small fall in asking prices, coupled with stable numbers of new properties coming to the market each month, are strong indicators that forced sales are not widespread.
The number of sales being agreed is now only 10 per cent below the same period in 2019, improving from being 15 per cent below 2019’s level last month.
The pandemic-driven stock shortage also now appears to be over, with the number of available homes for sale now just one per cent behind this time in 2019. While there is certainly no glut of homes for sale, buyers across Great Britain are likely to see much more choice in their local area compared to a year ago.
However, Rightmove reminds investors that these are averages across Britain, and in the current very price-sensitive market some areas and sectors are faring better than others during this period of pricing transition.
The number of sales being agreed in the smallest homes sector (studio, one-, and two-bed properties) is just seven per cent lower than 2019’s level, compared to the largest homes sector (four-bed detached houses and all five-bed plus properties), where agreed sales are 14 per cent behind 2019.
Meanwhile, there are yearly price declines in the Midlands and all Southern regions, however the more affordable areas of Wales, Scotland and the North of England have seen asking price rises, as the changed market conditions affect local housing markets in different ways.
Rightmove’s Director of Property Science, Tim Bannister, says: “We’d expect to see a drop in new seller asking prices in the last couple of months of the year, as serious sellers start to separate themselves from discretionary sellers and cut through the Christmas noise with an attractive price to secure a buyer.
“However, the larger than usual 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. It now looks like more sellers are understanding Rightmove’s research; that the chances of securing a buyer are much greater if they price right the first time, rather than over-pricing and reducing their price later.”
Rightmove suggests many would be investors, buyers and sellers will be looking to the forthcoming Autumn Statement for any policy announcements or market incentives.
One rumoured announcement is a renewal of the mortgage guarantee scheme, which encourages lenders to offer a 95 per cent Loan-To-Value mortgage helping those with a smaller deposit.
However, data from the Bank of England and the Financial Conduct Authority shows only around five per cent of mortgages taken out are of this kind, highlighting the limitations of the scheme.
Bannister concludes: “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.”