First-time buyers are feeling the economic pinch as a rapid rise in fixed mortgage rates derails home-mover plans but buyers who had already agreed purchases are home free, latest analysis from Rightmove reveals.

Figures released this morning show that the average price of property coming to market has risen by 0.9% (+£3,398) this month to a new record of £371,158 as shortages of property for sale continue to underpin prices.

PRESSURE

There is also little sign of downwards price pressure on existing properties for sale, with the number of reductions up 2% on last month to 23% of all properties reduced – still lower than the pre-pandemic 5-year average of 32%.

Normal annual price drops in November and December are expected but some of these seasonal price changes could also be driven by other factors, potentially distorting the market.

New sellers coming to market in the month have been pricing strongly.”

Tim Bannister (pictured), Rightmove’s director of property science, says that there are more economic events to play out before they can make a prediction for 2023.

“New sellers coming to market in the month have been pricing strongly,” he says. “It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”

The rapid rise in average mortgage interest rates has caused some would-be home-movers to pause their plans and wait to see how the next few weeks and months unfold.

DEMAND

Demand is down by 15% in the last two weeks compared with the same two weeks last year. But it is still 20% higher than the more normal market of 2019.

Bannister adds: “Those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now.”