Rightmove predicts 2% asking price drop in 'hyper-local market' for 2023

Rightmove is forecasting a ‘less urgent’ market in 2023 and is predicting asking prices will drop by 2%.

It comes as the latest data from the portal shows asking prices have fallen more than usual for this time of year.

Rightmove’s latest House Price Index for December showed the average asking price of newly listed property dropped by 2.1% this month to £359,137. 

It said this was a bigger dip in new asking prices than is usual at this time of year and was attributed to sellers adjusting expectations.

Asking prices now end the year up 5.6% to £359,137, which is slower than the 6.3% growth recorded in 2021.

Economic headwinds including rapidly rising mortgage costs mean that some would-be buyers may have paused their plans for the foreseeable future, Rightmove said.

However, over the past two weeks the number of people enquiring to estate agents is up 4% on the same period in 2019, according to the portal’s report.

The number of views of homes for sale on Rightmove is also up 11% on last year, which the property website said indicates that there are many ready-to-go buyers, monitoring and waiting for a calmer market in 2023 after an uncertain last few months of the year.

Tim Bannister, Rightmove’s director of property science, said: “Though we would always expect prices to drop in December, as motivated sellers try to capture the attention of a buyer before Christmas with a competitive price, this monthly dip is the largest we’ve seen for four years. 

“It‘s an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October, before things began to settle down.”

Rightmove is now predicting an overall drop of 2% in average asking prices next year as it forecasts a “multi-speed hyper-local market emerges, with some locations, property types and sectors faring much better than others.”

He added: “After many months of having to act extremely quickly, there will be less urgency in the market as buyers wait for the right home to become available for their needs, and some sellers will hold out hoping for a price that matches their expectations.

“We could therefore see a stand-off in the early months of 2023 between some sellers who are in no rush to drop their prices, and those affordability-strapped or hesitant buyers. This will lead to homes taking longer to sell, and we could see a return to the more normal time to find a buyer of around 60 days.”