What’s Happening In The Housing Market?
26th September 2023
26th September 2023
The summer is normally a quiet period for the property market, while people focus on their holidays. But this year was even quieter than usual, as high mortgage rates continued to impact some people’s home-moving plans. And though we’ve seen mortgage rates edge down slowly since the end of July, the average rate for a 5-year fixed rate mortgage is still 5.67%, up from 4.16% a year ago.
We look at things like the asking prices new sellers are listing their properties for, and demand from home-movers as an indicator of what’s happening in the housing market right now. You can read about this in more detail in our monthly House Price Index. And the number of reductions – that’s a property that’s been listed for sale at a price that’s then been lowered later – can also be a good indicator of how price sensitive home-hunters are. Higher monthly mortgage payments mean potential home-buyers need to be certain that a property is right for them before making an offer. And this has led to an increased number of sellers reducing their asking prices in order to secure a sale.
Last month, 36% of properties listed for sale were reduced, which is 5% higher than the 5-year pre-pandemic average for this time of year, and the highest overall number since 2011. The amount sellers have dropped their asking prices by has also gone up, with an average reduction of 6.2%, or by £22,709 based on the national average asking price.
Average asking prices climbed by 0.4% this month, to £366,281. But this increase is smaller than the average rise we normally see at this time of year, when sellers price their homes knowing they’ll have new, motivated home-movers coming to market after the quieter summer.
This lower-than-average monthly increase is likely due to many new sellers listening to their agents’ advice to price their homes right first time. And for those looking to sell soon, pricing right will set sellers up with the best chance of their home finding a buyer.
Rightmove property expert, Tim Bannister, says: “As we enter a key selling season, more people who have been thinking about what they need from a home and where they want to be living next year and beyond are taking action and coming to market. This has helped to improve buyer choice, especially for those looking for larger homes, which also means that new sellers in the middle and upper sectors need to be extra careful not to set their price expectations too high.”
Those looking to move may also find they have a wider range of homes to view in their chosen areas, as more people list their properties for sale as we head into the usually busier autumn season. There were 12% more properties coming to market in the first week of September than during the – unusually low – weekly average for August.
But while we’re seeing more homes coming onto the market, this isn’t resulting in a glut of properties for sale. There are currently 7% fewer homes listed than during 2019, and homes that are realistically priced are still finding buyers, and spending a shorter period of time on the market:
“Plenty of sales are being agreed for properties that are priced at the right level, and those that are selling are still taking five days less than at this time in 2019. We’re also seeing the number of fall-throughs decline as market conditions and mortgage rates stabilise”, adds Tim.
We’ve seen the average rates for fixed-rate mortgages edge down every week since the end of July. The average rate for a 5-year fixed, 85% loan-to-value mortgage is 5.69%, which would translate to monthly repayments of £1,198 if you were buying a first-time-buyer home (£225,244). You can check the weekly mortgage rates here, updated weekly, with comment from mortgage expert, Matt Smith.