Rightmove – prices down, but more likely due to holidays than rate rise

The latest research from Rightmove has revealed that the price of property coming to the market has witnessed its first fall this year, falling 1.3% (or -£4,795) in the month to £365,173.

However, this is being put down to the traditional holiday season – when prices and activity typically fall – rather than the recent interest rate rises or the cost-of-living crisis.

Rightmove says prices usually drop in August, with this 1.3% drop on a par with the average August fall over the past decade.

The portal argues that summer holidays are taking priority for many – with people able to go abroad more easily for the first time in two years – while some new sellers are pricing more competitively to secure a buyer quickly. This is in order to beat the lengthy average time to completion (currently estimated to be around 150 days) and move home before Christmas.

Supply constraints are improving and demand continues to soften, Rightmove adds, but the website says there is still a massive imbalance, which is keeping price falls low.

The research found that buyer enquiries to agents are down 4% on the hot market of 2021 (when the stamp duty holiday was still in play), but still remain 20% higher than 2019.

Meanwhile, new listings have increased by 12% on the same period in 2021, but remain 6% down on 2019. Available stock is also down 39% on 2019.

Rightmove says the latest interest rate rise of 0.5%, increasing the base rate to 0.75%, is placing further pressure on buyer affordability, with average monthly mortgage payments for new first-time buyers putting down a 10% deposit surpassing £1,000 for the first time.

This month also marks 20 years of Rightmove’s House Price Index, with national average asking prices more than doubling since 2002 (up by 34%). Prices in that time have gone from £155,994 to £365,173, comfortably outstripping both salaries and general inflation.

“A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays,” Tim Bannister, Rightmove’s Director of Property Science, said.

“Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic. Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home.”

He added: “To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and a half months. Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end year at around 7% annual growth, even with the wider economic uncertainty.”